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

Vincent J. Shea (), Kevin E. Dow (), Alain Yee-Loong Chong () and Eric W. T. Ngai ()
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Vincent J. Shea: St. John’s University
Kevin E. Dow: Nottingham University Business School China, University of Nottingham
Alain Yee-Loong Chong: Nottingham University Business School China, University of Nottingham
Eric W. T. Ngai: Hong Kong Polytechnic University

Information Systems Frontiers, 2019, vol. 21, issue 1, No 13, 213-227

Abstract: 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.

Keywords: IT investments; Regression discontinuity design; Event study; Business value (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (7)

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DOI: 10.1007/s10796-017-9735-5

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