An examination of the long-term business value of investments in information technology

Vincent J. Shea, Kevin Dow, Alain Yee Loong Chong, Eric W.T. Ngai

Research output: Journal PublicationArticlepeer-review

21 Citations (Scopus)
4 Downloads (Pure)

Abstract

In this paper, we examine the effects of investments in Information Technology (IT) on the long term business values of organizations. The regression discontinuity design is used in this research to examine eight hundred and ten IT investment announcements collected from the period 1982–2007. Our results found that press releases can affect the market value of a firm by possibly providing investors with a better idea of a firm’s current and future operations and strategy. On the other hand, these press releases also appear to attract more transient investors. The attraction of transient investors likely suggests the market believes the IT investing firm is serious about its potential for growth and expansion.

Original languageEnglish
Pages (from-to)213-227
Number of pages15
JournalInformation Systems Frontiers
Volume21
Issue number1
DOIs
Publication statusPublished - 15 Feb 2019

Keywords

  • Business value
  • Event study
  • IT investments
  • Regression discontinuity design

ASJC Scopus subject areas

  • Software
  • Theoretical Computer Science
  • Information Systems
  • Computer Networks and Communications

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