An Examination of the Long-Term Business Value of Investments in Information Technology

Inf Syst Front 21, 213–227 (2019). https://doi.org/10.1007/s10796-017-9735-5

The University of Auckland Business School Research Paper Series

Posted: 10 Feb 2022

See all articles by Vincent J. Shea

Vincent J. Shea

St. John’s University

Kevin Dow

University of Auckland Business School

Alain Chong

Independent

Eric W. T. Ngai

Hong Kong Polytechnic University

Date Written: 2019

Abstract

In this paper, we examine the effects of investments in Information Technology (IT) on the long term business values of organizations. The regression discontinuity design is used in this research to examine eight hundred and ten IT investment announcements collected from the period 1982–2007. Our results found that press releases can affect the market value of a firm by possibly providing investors with a better idea of a firm’s current and future operations and strategy. On the other hand, these press releases also appear to attract more transient investors. The attraction of transient investors likely suggests the market believes the IT investing firm is serious about its potential for growth and expansion. Full paper available at https://doi.org/10.1007/s10796-017-9735-5

Keywords: IT investments, Regression discontinuity design, Event study, Business value

Suggested Citation

Shea, Vincent J. and Dow, Kevin and Chong, Alain and Ngai, Eric W.T., An Examination of the Long-Term Business Value of Investments in Information Technology (2019). Inf Syst Front 21, 213–227 (2019). https://doi.org/10.1007/s10796-017-9735-5, The University of Auckland Business School Research Paper Series, Available at SSRN: https://ssrn.com/abstract=4027107

Vincent J. Shea (Contact Author)

St. John’s University

Department of Economics and Finance
Tobin College of Business
Queens, NY 11439

Kevin Dow

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

Alain Chong

Independent ( email )

Eric W.T. Ngai

Hong Kong Polytechnic University ( email )

Hung Hom, Kowloon
Hong Kong

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