ABSTRACT: Recently the globalization of competition has caused many firms in the financial services industry to integrate their information systems. Based on a selective review of literature from strategic and information management disciplines, a model is developed to study the firms' strategic response to Europe 1992 and Canada-U.S. Free Trade Agreements. According to a survey of 213 managers, this study finds that competitive strategy, information technology (IT) maturity and size influence firms' perceived increase in IT investment. Further, this study finds that the degree of IT integration within firms is a primary determinant of firms' willingness to use IT as part of their strategic response to globalization. It suggests that the new competitive strategies will be increasingly technology-based global initiatives that are affected by the firms' IT maturity.
Key words and phrases: globalization, Europe 1992, Canada-U.S. Free Trade Agreements, firms' strategic response to globalization, information technology investment, competitive strategy, information technology maturity