The DOI matches its Crossref record; 2 of the 2 references it cites were found in a registry or an index.
The Impact of Information Technology Investment Announcements on the Market Value of the Firm
Abstract
Determining whether investments in information technology (IT) have an impact on firm performance has been and continues to be a major problem for information systems researchers and practitioners. Financial theory suggests that managers should make investment decisions that maximize the value of the firm. Using event-study methodology, we provide empirical evidence on the effect of announcements of IT investments on the market value of the firm for a sample of 97 IT investments from the finance and manufacturing industries from 1981 to 1988. Over the announcement period, we find no excess returns for either the full sample or for any one of the industry subsamples. However, cross-sectional analysis reveals that the market reacts differently to announcements of innovative IT investments than to followup, or noninnovative investments in IT. Innovative IT investments increase firm value, while noninnovative investments do not. Furthermore, the market's reaction to announcements of innovative and noninnovative IT investments is independent of industry classification. These results indicate that, on average, IT investments are zero net present value (NPV) investments; they are worth as much as they cost. Innovative IT investments, however, increase the value of the firm.
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Cites
Information Systems Success: The Quest for the Dependent Variable
DeLone, W. H., & McLean, E. R. (1992) · Information Systems Research · doi:10.1287/isre.3.1.60 · Cited by 10,697
FAMA, E. F. (1991) · The Journal of Finance · doi:10.1111/j.1540-6261.1991.tb04636.x · Cited by 5,350
Cited by
Bharadwaj, A. S. (2000) · MIS Quarterly · doi:10.2307/3250983 · Cited by 5,042
Paradox Lost? Firm-Level Evidence on the Returns to Information Systems Spending
Brynjolfsson, E., & Hitt, L. (1996) · Management Science · doi:10.1287/mnsc.42.4.541 · Cited by 2,112
Jafari-Sadeghi, V., Garcia-Perez, A., Candelo, E., & Couturier, J. (2021) · Journal of Business Research · doi:10.1016/j.jbusres.2020.11.020 · Cited by 486
Enterprise resource planning systems: comparing firm performance of adopters and nonadopters
Hunton, J. E., Lippincott, B., & Reck, J. L. (2003) · International Journal of Accounting Information Systems · doi:10.1016/s1467-0895(03)00008-3 · Cited by 474
Industry 4.0: A Solution towards Technology Challenges of Sustainable Business Performance
Haseeb, M., Hussain, H. I., Ślusarczyk, B., & Jermsittiparsert, K. (2019) · Social Sciences · doi:10.3390/socsci8050154 · Cited by 459
Metadata
- Authors
- Dos Santos, B. L., Peffers, K., & Mauer, D. C.
- Venue
- Information Systems Research
- Published
- 1993-03
- Volume
- 4
- Issue
- 1
- Pages
- 1-23
- ISSN
- 1047-7047 (ISSN-L)
- 1526-5536
- OpenAlex
- W2122224612
- Cited by
- 644
- References
- 2
- FWCI
- 13.49
- Type
- journal article
- Language
- en
- Open access
- closed
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- Dos Santos, B. L., Peffers, K., & Mauer, D. C. (1993). The Impact of Information Technology Investment Announcements on the Market Value of the Firm. Information Systems Research. https://doi.org/10.1287/isre.4.1.1
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
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