How Firm Age and Size Influence Value Creation from Cloud Computing

Most studies of value creation from cloud computing have examined firms that are old in age and large in size. We theorize different value appropriation pathways from cloud computing dependent upon the age and size of a firm, such that there are different pathways for younger firms as compared to established firms, and smaller firms as compared to larger firms. We hypothesize that established firms gain more Business Performance from Enterprise Cloud Capability – a higher-order capability formed of three second-order cloud computing capabilities, through the mediation effect of Business Responsiveness, whereas younger firms gain more Business Performance directly from Enterprise Cloud Capability. We further hypothesize that smaller firms achieve higher Business Performance through the mediating effect of Business Scalability, whereas larger firms achieve more Business Performance directly from Enterprise Cloud Computing. Partial least squares analysis of matched pair survey data from 197 firms in India provides support for our theory