The Impact of Business Intelligence Systems on Stock Return Volatility

35 Pages Posted: 4 Dec 2007 Last revised: 30 Jul 2009

See all articles by Eran Rubin

Eran Rubin

University of Akron - College of Business Administration

Amir Rubin

Simon Fraser University (SFU) - Beedie School of Business; Interdisciplinary Center (IDC) Herzliyah

Date Written: November 30, 2007

Abstract

Business Intelligence (BI) systems support decision-making and information sharing within increasingly complex organizational environments. As investment in these systems is steadily increasing in a wide range of industries, it is important to understand the effect they have on companies. We claim that BI systems impact companies in two important ways: 1) they stabilize the decision-making process, and 2) they increase the visibility of company information to stakeholders. With BI decisions become increasingly data based and reports available to stakeholders become more informative. This in turn, can lead to more consistent and predictable company performance. Hence, we hypothesize that BI systems can help to reduce the company's stock return volatility. To test this hypothesis, we have conducted an empirical analysis on a sample of firms that have deployed a BI system. The results indicate a significant reduction in stock return volatility after BI deployment.

Keywords: Business Intelligence, Stock Return Volatility, Decision Support, Information Availability

Suggested Citation

Rubin, Eran and Rubin, Amir, The Impact of Business Intelligence Systems on Stock Return Volatility (November 30, 2007). Available at SSRN: https://ssrn.com/abstract=1045581 or http://dx.doi.org/10.2139/ssrn.1045581

Eran Rubin (Contact Author)

University of Akron - College of Business Administration ( email )

Akron, OH 44325-4803
United States
330-9726443 (Phone)

Amir Rubin

Simon Fraser University (SFU) - Beedie School of Business ( email )

8888 University Drive
Burnaby, British Colombia V5A 1S6
Canada

Interdisciplinary Center (IDC) Herzliyah ( email )

P.O. Box 167
Herzliya, 46150
Israel

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