Market Reaction to ERP Implementation Announcements

Abstract

The objective of this research is to examine how the capital market responds when a firm announces that it plans to implement an enterprise resource planning (ERP) system. This is the first study to investigate the extent to which ERP systems are deemed to add market value to business organizations. Study findings indicate an overall positive reaction to initial ERP announcements. Further analyses suggest that the reaction is most positive for small/healthy firms. Finally, the market response to larger ERP vendors, as reflected by PeopleSoft and SAP, is significantly more positive than to smaller ERP vendors.

The Association between Information Technology Investments and Audit Risk

“…Our research fills this gap by examining IT and audit risk in an integrated research setting. Second, prior accounting literature, such as Hayes et al (2001), Ranganathan and Brown (2006), and Dorantes et al (2013), documents the effects of IT by using an indicator variable to represent whether companies implement Enterprise Systems specifically (ERP, SCM, CRM system, etc.) or not.…”

Stock market reaction to ict implementation: model based on comparison of developed and transition economies

“…It was not possible to compare this result with the result of developed economy, as there was no study that would investigated this factor on the US market. On the contrary, the other factors of this category that were found in the studies focused on the US market are for instance type of company's industry [21] or its size [19].…”

“…This model including fi ve categories of factors within an abnormal return of company under particular conditions was measured ( Figure 1). Based on this model the results of stock market reactions from US as a developed country [19], [30] and transition countries Czech Republic, Hungary, Slovakia [10] and Poland [11] were compared. However, in each of fi ve categories there are more factors infl uencing the impact of ICT investment announcements.…”

“…In developed countries such as US, the positive signifi cant reaction for large global vendors has been found [19]. According to the [19], this effect is caused by higher quality of auditor companies, which is correlated with company's size.…”

“…According to the [19], this effect is caused by higher quality of auditor companies, which is correlated with company's size. On the other hand, in transition economies positive reaction for global vendor has been found only in Poland.…”