Effect of IT Investment Announcements on the Market Value of Hospitality Firms Using Event Study Methodology

Sang Hyuck Kim, Woo Gon Kim and Murat Hancer
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Sang Hyuck Kim: School of Hospitality and Tourism Management, Kyungsung University, Daeyeon-3dong, Namgu, Busan, 608-736, Korea. Tel: +82 51 620 4467
Woo Gon Kim: International Center for Hospitality Research and Development, Dedman School of Hospitality and College of Business, Florida State University, 1 Champions Way, UCB 4116, PO Box 3062541, Tallahassee, FL 32306-2541, USA
Murat Hancer: School of Hotel and Restaurant Administration, Oklahoma State University, Stillwater, OK, USA

Tourism Economics, 2009, vol. 15, issue 2, 397-411

Abstract: The goals of this study are to examine the impact of IT investment announcements on firms' stock prices and to test the productivity paradox of IT investment in the hospitality industry by adopting event study methodology. The cautious interpretation of the results lends support for a positive link between IT investment announcements and financial performance. Furthermore, this study's descriptive analysis indicates that the trend of abnormal returns and cumulative abnormal returns shows steady increases over the three-day event windows. This study provides the stepping-stone to solving the IT productivity paradox and offers useful information for IT investment decision making in the hospitality business.

Keywords: IT investment announcements; productivity paradox; financial performance; stock price; abnormal returns (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:15:y:2009:i:2:p:397-411

DOI: 10.5367/000000009788254304

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