Edge Computing Announcements and Stock Value: A Signaling Theory View

Edge computing gained attention from researchers and practitioners and firms are now increasingly engaged in edge computing initiatives. Yet, an understanding of edge computing’s financial value remains elusive. In this study, we conceptualize the relationship between the edge computing initiatives of firms and the market reaction based on the signal theory. Based on 147 edge computing initiative announcements disclosed by the United States listed firms during 2015–2025, we employ an event study to investigate the impact of these initiatives on firms’ market value. We empirically find that edge computing announcements are associated with a significant average abnormal return of 0.33% on the announcement day. We find that the stock market reaction to edge computing announcements is more positive when the edge computing is used to applied in mobile items or to save energy. Additionally, we find that positive stock market reaction is more pronounced for strategy-focused edge computing initiative announcements than for operation-focused ones. Our results also suggest that firm size attenuates the positive stock market reaction.