Assessing The Influence of Information Technology Investments on Firm Efficiency and Financial Performance in Kurdistan’s Manufacturing Companies: The Sem Analysis

Abstract

This journal article aims to investigate the impact of Information Technology investments on the efficiency and financial performance of manufacturing companies in the Kurdistan region. 382 questionnaire responses were drawn from the industrious zones of Erbil namely; Qushtapa Industrial Area, Sheikh Choly Industrial Area, Erbil Free Zone and Erbil Industrial Zone and analysed using a Structural Equation Modeling approach. The findings revealed that manufacturing companies that strategically invest in information technology will experience higher levels of operational efficiency and financial performance compared to those with limited IT investments. It was also revealed that firms with higher operational efficiency will exhibit superior financial performance compared to those with lower operational efficiency. The findings suggest a dynamic and multifaceted relationship between IT investments and overall firm performance in manufacturing companies in Kurdistan. Manufacturing companies can use these findings to inform their strategic IT planning. Understanding that strategic IT investments positively impact operational efficiency emphasizes the need for careful planning and alignment of IT initiatives with overall business goals.