The Impact of E-Commerce Announcements on the Market Value of Firms

Abstract

How do the returns to e-commerce initiatives involving digital goods compare to initiatives involving tangible goods? We examine these issues using event study methodology and assess the cumulative abnormal returns to shareholders (CARs) for 251 e-commerce initiatives announced by firms between October and December 1998. The results suggest that e-commerce initiatives do indeed lead to significant positive CARs for firms' shareholders. While the CARs for conventional firms are not significantly different from those for net firms, the CARs for businessto-consumer (B2C) announcements are higher than those for business-to-business (B2B) announcements. Also, the CARs with respect to e-commerce initiatives involving tangible goods are higher than for those involving digital goods. Our data were collected in the last quarter of 1998 during a unique bull market period and the magnitudes of CARs (between 4.9 and 23.4% for different subsamples) in response to e-commerce announcements are larger than those reported for a variety of other firm actions in prior event studies. This paper presents the first empirical test of the dot com effect, validating popular anticipations of significant future benefits to firms entering into e-commerce arrangements.

Strength in Numbers: How Does Data-Driven Decisionmaking Affect Firm Performance?

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

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“…There were many studies investigating effect of special types of investments, as for instance, in e-commerce [15], [31], in ERP [19], or in CRM, etc., however they were conducted only on the markets of developed economies.…”

Analyzing the Effects of Knowledge Resource Complementarity Structures on the Choice between Strategic Alliances and Merge and Acquisitions (M&As) in Information Technology Industries

“…기존 전략적 동맹이나 인수합병 관 련 연구는 i) 두 지배구조가 상이함에도 불구 하고 이를 호환적(interchangeable)으로 일반 화하여 사용하는 연구 [16,25], ii) 둘 가운데 하나의 지배구조에만 초점을 둔 연구 [20,22] 률은 다음과 같이 계산하였다 [21,37]. [4,37]. …”