In recent years, there has been an increasing interest in using information technology to improve supply chain management (SCM) performance. This study examines the shareholder wealth effects of SCM software initiatives, and thereby contributes to the literature on IT investments and SCM. Specifically, we examined the abnormal stock returns to SCM software initiatives announced by firms between 2000 and 2003. Based on a sample of 346 public announcements, we find that the market returns for SCM software investment announcements were positive and significant. In addition, multiple regression analysis is used to evaluate the impact of several firm specific and investment specific variables on the direction and magnitude of the change in the stock market reactions. We find higher functional scope and higher physical scopes of the SCM projects to be associated with greater abnormal market returns. Our analysis did not indicate firm size or industry affiliation to be significant differentiators of stock market reactions.
Ye, Chen and Ranganathan, C., "Shareholder Wealth Effects of Information Technology Enabled Supply Chain Mnagement Initiatives" (2005). ICIS 2005 Proceedings. 56.