A Tough Pill to Swallow? The Lessons Learned from Mandatory RFID Adoption

Ariel K.H. Lui, Chris L.K. Lo, Eric W.T. Ngai, Andy Yeung

Research output: Contribution to journalArticlepeer-review


On some occasions, information technology (IT) is mandated rather than voluntary. However, the impact of mandatory IT adoption receives little attention in the operations management literature, and the literature shows divergent predictions about how mandatory IT affects financial performance. Using the case of mandatory radio-frequency identification (RFID) adoption in manufacturing industries, this study applies long-horizon event study to examine 95 U.S. listed firms that have adopted mandatory RFID. The results
show that firms achieve significantly strong financial performance from mandatory adoption. Mandatory RFID is particularly beneficial for firms with good financial health, late adopters and high-clockspeed firms.
The current study provides a deeper understanding of supplier benefits from mandatory systems supported by dominant customers. Based on the lessons learned from past mandatory RFID adoption, the present study can serve as guidance for future projects and contribute to the literature on operations management and information systems
Original languageEnglish
Article number108811
JournalInternational Journal of Production Economics
Early online date17 Feb 2023
Publication statusPublished online - 17 Feb 2023

Bibliographical note

Publisher Copyright:
© 2023 Elsevier B.V.

Funding Information:
The authors are grateful for the constructive comments of the referees on a previous version of this paper.

Publisher Copyright:
© 2023 Elsevier B.V.


  • RFID
  • mandate
  • firm performance
  • contextual factors
  • Contextual factors
  • Firm performance
  • Mandate


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