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Shareholder reaction to firm investments in the capability maturity model: an event study

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  • Greg Filbeck
  • Matthew Swinarski
  • Xin Zhao

Abstract

This study investigates the differential effects of successfully completed capability maturity model (CMM) appraisals on a firm's short-term and long-term stock performance. Our results indicate a positive share price response on the days surrounding the appraisal date for the stocks of companies obtaining the CMM appraisal. Stocks of firms successfully completing CMM appraisals generally outperform the S&P 500 index over longer-holding periods, although they do not outperform a matched sample. We find support that firms from the information technology industry, firms that are larger, firms of higher CMM maturity levels, and firms completing multiple appraisals are more likely to experience both short-term and long-term benefits from their investing in the CMM.

Suggested Citation

  • Greg Filbeck & Matthew Swinarski & Xin Zhao, 2013. "Shareholder reaction to firm investments in the capability maturity model: an event study," European Journal of Information Systems, Taylor & Francis Journals, vol. 22(2), pages 170-190, March.
    • Handle: RePEc:taf:tjisxx:v:22:y:2013:i:2:p:170-190
    DOI: 10.1057/ejis.2012.54
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    Cited by:

    1. Syed Emad Azhar Ali & Fong-Woon Lai & Ahmad Ali Jan & Haseeb ur Rahman & Syed Quaid Ali Shah & Salaheldin Hamad, 2024. "Does intellectual capital curb the long-term effect of information security breaches on firms’ market value?," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(4), pages 3673-3702, August.

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