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Effect of IT Investment Announcements on the Market Value of Hospitality Firms Using Event Study Methodology

Author

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  • Sang Hyuck Kim

    (School of Hospitality and Tourism Management, Kyungsung University, Daeyeon-3dong, Namgu, Busan, 608-736, Korea. Tel: +82 51 620 4467)

  • Woo Gon Kim

    (International Center for Hospitality Research and Development, Dedman School of Hospitality and College of Business, Florida State University, 1 Champions Way, UCB 4116, PO Box 3062541, Tallahassee, FL 32306-2541, USA)

  • Murat Hancer

    (School of Hotel and Restaurant Administration, Oklahoma State University, Stillwater, OK, USA)

Abstract

The goals of this study are to examine the impact of IT investment announcements on firms' stock prices and to test the productivity paradox of IT investment in the hospitality industry by adopting event study methodology. The cautious interpretation of the results lends support for a positive link between IT investment announcements and financial performance. Furthermore, this study's descriptive analysis indicates that the trend of abnormal returns and cumulative abnormal returns shows steady increases over the three-day event windows. This study provides the stepping-stone to solving the IT productivity paradox and offers useful information for IT investment decision making in the hospitality business.

Suggested Citation

  • Sang Hyuck Kim & Woo Gon Kim & Murat Hancer, 2009. "Effect of IT Investment Announcements on the Market Value of Hospitality Firms Using Event Study Methodology," Tourism Economics, , vol. 15(2), pages 397-411, June.
    • Handle: RePEc:sae:toueco:v:15:y:2009:i:2:p:397-411
    DOI: 10.5367/000000009788254304
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    References listed on IDEAS

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    1. Kun Shin Im & Kevin E. Dow & Varun Grover, 2001. "Research Report: A Reexamination of IT Investment and the Market Value of the Firm—An Event Study Methodology," Information Systems Research, INFORMS, vol. 12(1), pages 103-117, March.
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    Cited by:

    1. Nicolau, Juan Luis & Sharma, Abhinav, 2022. "A review of research into drivers of firm value through event studies in tourism and hospitality: Launching the Annals of Tourism Research curated collection on drivers of firm value through event stu," Annals of Tourism Research, Elsevier, vol. 95(C).

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