The Value Relevance of Announcements of Transformational Information Technology Investments

This paper both confirms and extends the value relevance of information technology (IT) announcements found by K.S. Im et al. (2001) and B.L. Dos Santos et al. (1993). We extend their work by proposing that an overarching construct, the strategic IT role in an industry, accounts for the factors previously found to affect the stock market response to IT announcements. These results provide support for the value of capturing the nature of an industry's IT-related competitive maneuvering in studies striving to understand the conditions under which IT investments are likely to produce out-of-the-ordinary, positive returns