Information Technology Investment and Price Recovery Effects in International Banking

29 Pages Posted: 15 Oct 2008

See all articles by Katherine A. Duliba

Katherine A. Duliba

affiliation not provided to SSRN

Robert J. Kauffman

Singapore Management University; Singapore Management University - School of Information Systems

Date Written: July 1996

Abstract

Finns invest in information technology (IT) to create various kinds of leverage on firm profitability and performance.However, IT researchers have concentrated their efforts on the productivity impacts of technology, at the employee, process,firm, industry, and economy levels of analysis, to the exclusion of other business value impacts. Not captured byproductivity metrics are the significant benefits that may accrue to the firm as product quality improves, managerialassessment of risk is enhanced, time to market and other cycle time reductions are made, and new ways to control firminput and output prices become available to management. These kinds of impacts reflect price recovery improvements -the ratio of the prices of a firm's outputs (of goods and services) to the prices of the inputs it consumes in production - andthey are rarely measured or understood in a systematic way. In this paper, we argue that it is appropriate to reconsider thecurrent measurement and research agenda that aims to discover and document the payoffs that accrue from corporateinvestments in IT. We illustrate the extent to which IT investment may be motivated by management's understanding ofthe potential price recovery payoffs (even if they fail to carefully measure or report them) in the context of trading andtreasury operations in international banking. We find that price recovery captures a previously unmeasured dimension of thebusiness value of IT.

Keywords: Business value of IT, financial services, IT investment, international banking, productivity, price recovery, risk management

Suggested Citation

Duliba, Katherine A. and Kauffman, Robert J., Information Technology Investment and Price Recovery Effects in International Banking (July 1996). NYU Working Paper No. 2451/14197, Available at SSRN: https://ssrn.com/abstract=1284814

Katherine A. Duliba (Contact Author)

affiliation not provided to SSRN

No Address Available

Robert J. Kauffman

Singapore Management University ( email )

Li Ka Shing Library
70 Stamford Road
Singapore 178901, 178899
Singapore
65-6828-929 (Phone)

Singapore Management University - School of Information Systems ( email )

80 Stamford Road
Singapore, 178902
Singapore

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
127
Abstract Views
969
rank
246,671
PlumX Metrics