Parameter Heterogeneity in a Model Which Estimates the Business Value of Information Technology
19 Pages Posted: 31 Oct 2008
Date Written: August 1989
Developing robust and refined measures to quantify strategic impacts is a major challenge facing researchers who seek toimprove methods for information technology (IT) investment evaluation. This paper presents a means to test for parameterheterogeneity in a model which quantifies the strategic contribution of IT. An iterative "jackknife" procedure is used todiagnose if different local competitive and demographic conditions present in branch banking enhance or suppress leverageon deposit market share associated with membership in an automated teller machine (ATM) network. The results arevalidated using correlation analysis and re-estimating partitioned data sets for a market share model developed by Banker andKauffman (1988). Overall, the results suggest this new approach will be useful for managers who need to evaluate similar ITSwhich operate in different environments.
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