Senior Executives, IT Reputation Building & Implications for Market Valuation

37 Pages Posted: 15 Jan 2013

See all articles by Jee-Hae Lim

Jee-Hae Lim

University of Hawaii, Manoa

Theophanis C. Stratopoulos

University of Waterloo - School of Accounting and Finance

Tony S. Wirjanto

University of Waterloo - School of Accounting and Finance; University of Waterloo, Department of Statistics & Actuarial Science

Date Written: January 10, 2013

Abstract

The objective of this study is to identify factors that help build an IT reputation, and to evaluate whether markets value a firm’s ability to develop and sustain its IT reputation. Building on IT strategic leadership and IT business value literature, we argue that a similarity in the background and hierarchical proximity between CEO and senior IT executive increases the likelihood that the firm will develop an IT reputation, and this similarity/proximity is more important for product differentiating companies. Building on signaling theory, we argue that IT reputation matters to investors because it reduces information asymmetry. Investors interpret a firm’s sustainable IT reputation as a signal of its superior past IT strategy and future IT investment prospects thus raising its market value. The predicted relationships are validated by results from over 1300 US firms that have appeared in the Information Week 500 lists in the period from 1997 to 2009.

Keywords: IT reputation, Tobin’s Q, CEO, IT executives, expert power, structural power

Suggested Citation

Lim, Jee-Hae and Stratopoulos, Theophanis C. and Wirjanto, Tony S., Senior Executives, IT Reputation Building & Implications for Market Valuation (January 10, 2013). CAAA Annual Conference 2013. Available at SSRN: https://ssrn.com/abstract=2201016 or http://dx.doi.org/10.2139/ssrn.2201016

Jee-Hae Lim (Contact Author)

University of Hawaii, Manoa ( email )

2404 Maile Way
Honolulu, HI Honolulu 96822
United States
(808) 956-8503 (Phone)
(808) 956-9888 (Fax)

HOME PAGE: http://shidler.hawaii.edu/directory/jee-hae-lim/soa

Theophanis C. Stratopoulos

University of Waterloo - School of Accounting and Finance ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1 N2L 3G1
Canada
519-888-4567 x35943 (Phone)

Tony S. Wirjanto

University of Waterloo - School of Accounting and Finance ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1
Canada
519-888-4567 x35210 (Phone)

HOME PAGE: http://https://uwaterloo.ca/statistics-and-actuarial-science/people-profiles/tony-wirjanto

University of Waterloo, Department of Statistics & Actuarial Science ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1
Canada
519-888-4567 x35210 (Phone)
519-746-1875 (Fax)

HOME PAGE: http://math.uwaterloo.ca/statistics-and-actuarial-science/people-profiles/tony-wirjanto

Register to save articles to
your library

Register

Paper statistics

Downloads
88
rank
282,796
Abstract Views
844
PlumX Metrics
!

Under construction: SSRN citations while be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information