Exploring Government Role in Promoting IT Advancement in China: An Empirical Study on Shanghai Firms’ IT Usage1

By analyzing the survey data from 1211 firms across 14 industries and across various ownerships in Shanghai, the study examines factors that influence information technology (IT) usage in Chinese firms applying a technology – organization environment framework and institutional theory. This study provides an in-depth investigation into the government’s role in promoting Chinese firms’ IT advancement. The finding suggests distinct paths where government actions affect firms’ IT adoption and usage. Although government cannot directly influence firms’ IT adoption, it does so by influencing firms’ IT infrastructure construction and management respectively. In other words, firms’ IT infrastructure development and IT management decision plays as a mediator between different government actions and firms’ IT adoption. Furthermore, firms adapt to governmental impact distinguishingly. The findings suggest that e-government approaches and government promotion policies have significant impact on IT usage in manufacturing firms, in local firms and in national-background firms. The study also provides valuable implications to government administrators in China, particularly to those in the modern cities like Shanghai.