Parameter Heterogeneity in a Model Which Estimates the Business Value of Information Technology

19 Pages Posted: 31 Oct 2008

See all articles by Robert J. Kauffman

Robert J. Kauffman

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

Avijit Ghosh

University of Illinois at Urbana-Champaign - Department of Business Administration

Arun Bansal

affiliation not provided to SSRN

Date Written: August 1989

Abstract

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.

Suggested Citation

Kauffman, Robert J. and Ghosh, Avijit and Bansal, Arun, Parameter Heterogeneity in a Model Which Estimates the Business Value of Information Technology (August 1989). NYU Working Paper No. IS-89-009, Available at SSRN: https://ssrn.com/abstract=1289683

Robert J. Kauffman (Contact Author)

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

Avijit Ghosh

University of Illinois at Urbana-Champaign - Department of Business Administration ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

Arun Bansal

affiliation not provided to SSRN

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