Process virtualization theory (PVT) and institutional theory (INT) to explain SAAS adoption

Software as a service (SaaS) is a service model in which the applications are accessible from various client devices through internet. Several studies report possible factors driving the adoption of SaaS but none have considered the perception of the SaaS features and the pressures existing in the organization’s environment. We propose an integrated research model that combines the process virtualization theory (PVT) and the institutional theory (INT). PVT seeks to explain whether SaaS processes are suitable for migration into virtual environments via an information technology-based mechanism. INT seeks to explain the effects of the institutionalized environment on the structure and actions of the organization. The research makes three contributions. First, it addresses a gap in the SaaS adoption literature by studying the internal perception of the technical features of SaaS and external coercive, normative, and mimetic pressures faced by an organization. Second, it empirically tests many of the propositions of PVT and INT in the SaaS context, thereby helping to determine how the theory operates in practice. Third, the integration of PVT and INT contributes to the information system (IS) discipline, deepening the applicability and strengths of these theories.

Earnings overseas and cash holdings

I investigate the impact of foreign pre-tax income on the total amount of cash held by companies and on the amount of cash that is held in companies’ foreign subsidiaries. I also investigate the impact of the existence and amount of cash held on companies’ foreign subsidiaries in the composition of cash holdings in terms of risk and liquidity. Using a sample of 100 largest U.S. non-financial and non-utilities companies I find that companies with higher earnings overseas present higher cash reserves and invest a higher fraction of their cash in risky assets. My evidence suggests that companies have a different optimization strategy for cash overseas, in which precautionary motives are not the main driver for holding cash.