This study employs two data sources: a data set of Information System budgets from 1995 to 1997, collected annually by Information Week, and the Compustat database. From the Information Week data set, IT intensity is calculated by dividing the Information System budgets by selling and general administrative expenses. The Information Week data set has been recently used by a number of Information System researchers, such as Anderson et al. [1], Bharadwaj [4], Hitt [19], Kudyba and Diwan [22], and Mithas et al. [26].