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Korean Academic Society of Business Administration
[ Article ]
korean management review - Vol. 54, No. 6, pp.1851-1875
ISSN: 1226-1874 (Print)
Print publication date 31 Dec 2025
Received 31 Aug 2025 Revised 03 Oct 2025 Accepted 14 Oct 2025
DOI: https://doi.org/10.17287/kmr.2025.54.6.1851

Returns to Cloud Computing Investment: The Role of Environmental Uncertainty

Jiyong Park ; Kunsoo Han
(First, Corresponding Author) University of Georgia jiyong.park@uga.edu
(Co-Author) McGill University kunsoo.han@mcgill.ca
박지용 ; 한건수


Copyright 2025 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Despite the significant potential of cloud computing to help firms adapt to uncertain and turbulent environments through flexibility, scalability, and reconfigurability, empirical evidence remains limited. This study addresses this gap by examining the impact of cloud computing on productivity and how its effects vary across different levels of environmental uncertainty. Using a novel measure of purchased cloud services in U.S. industries from 1997 to 2018, we further distinguish between software-as-a-service (SaaS) and infrastructure-as-a-service (IaaS). Employing a production function approach, our findings suggest that cloud computing investments do not uniformly translate into productivity gains. Instead, we observe significant variation depending on environmental conditions: while cloud computing enhances productivity in industries facing high uncertainty, it can even have adverse effects in highly stable environments. Moreover, the positive productivity effects under uncertainty appear to be driven primarily by IaaS rather than SaaS. Our findings contribute to the literature and offer important implications for IT strategy and digital resilience.

Keywords:

Cloud computing, Software-as-a-Service, Infrastructure-as-a-Service, IT outsourcing, IT productivity, Digital resilience

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∙ The author Jiyong Park is an Assistant Professor of Management Information Systems at the Terry College of Business, University of Georgia. He earned his Ph.D. in Management Engineering from the Korea Advanced Institute of Science and Technology (KAIST). His research focuses on digital sustainability, with particular emphasis on Green IS, the societal impacts of digital platforms, and the future of work. His work has appeared in leading journals such as Management Science, MIS Quarterly, Information Systems Research, and Journal of the Association for Information Systems, among others.

∙ The author Kunsoo Han is a Bensadoun Faculty Scholar and an Associate Professor of Information Systems at the Desautels Faculty of Management, McGill University. He received his Ph.D. from University of Minnesota. His research interests include IT outsourcing, the business value of IT, the societal impacts of IT, and IT-enabled channels. His work has appeared in leading journals such as Information Systems Research, Management Science, MIS Quarterly, Production and Operations Management, Journal of Management Information Systems, and MIT Sloan Management Review, among others.