The important role of Knowledge Sharing in the impact of Information Systems on Competitive Advantage

The development of information systems has made it easier for businesses to share knowledge, and the shared knowledge has become an important competitive advantage of businesses. This study aims to identify the important role of knowledge sharing in the impact of information system on competitive advantage. In addition, this study investigates the moderation effects of the number of employees, sales, and industry type. This study reviews the prior studies on information system, knowledge sharing, and competitive advantage and establishes research hypotheses based on the theoretical background on their relationship. Data were collected from Korean SMEs and the research model was analyzed through structural equation modeling. The results show that knowledge sharing is well established in Korean SMEs, and information system does not directly affect competitive advantage, but competitive advantage can be secured through the mediation effect of knowledge sharing. In addition, this study shows a moderation effect by company size and industry type in some interesting patterns: the effect of information system on knowledge sharing was greater in small companies rather than middle ones and in logistics companies rather than manufacturing ones, but the effect of knowledge sharing on competitive advantage was greater in middle companies rather than small ones and in manufacturing companies rather than logistics ones. Therefore, although competitiveness can be secured through physical resources such as IS, organizational culture such as information sharing can also play a big role, depending on the company size and industry type.