Start Date
11-8-2016
Description
Extant studies on the relationship between IT investment announcements and firm market value tend to consider the tangible effects of IT investments but ignore their effects through intangible factors, such as firm reputation, on firm market value. In this study we extend existing research by focusing on IT media exposure, defined and operationalized as the extent to which firm IT practices are reported by media within a prescribed period, and argue that IT media exposure is positively related to firm market value. We suggest that this is because IT media exposure can facilitate two mechanisms – building firm reputation and signaling firm IT capability – which can represent the effects of intangible factors. To test our conjecture, we collected data of 26 companies among S&P 500 under the health care section over a period of 22 years (1991-2012) and conducted a multilevel analysis (MLM). The results support our hypothesis.
Recommended Citation
Liu, Yucong; Chen, Andrew; and Sim, Jaesung, "Information Technology Media Exposure and Firm Market Value" (2016). AMCIS 2016 Proceedings. 9.
https://aisel.aisnet.org/amcis2016/SCU/Presentations/9
Information Technology Media Exposure and Firm Market Value
Extant studies on the relationship between IT investment announcements and firm market value tend to consider the tangible effects of IT investments but ignore their effects through intangible factors, such as firm reputation, on firm market value. In this study we extend existing research by focusing on IT media exposure, defined and operationalized as the extent to which firm IT practices are reported by media within a prescribed period, and argue that IT media exposure is positively related to firm market value. We suggest that this is because IT media exposure can facilitate two mechanisms – building firm reputation and signaling firm IT capability – which can represent the effects of intangible factors. To test our conjecture, we collected data of 26 companies among S&P 500 under the health care section over a period of 22 years (1991-2012) and conducted a multilevel analysis (MLM). The results support our hypothesis.