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Sat, Oct 8, 11:30 - 11:55, Senate B     Paper (refereed)
Recommended Citation: Boasson, V and E Boasson.  The Stock Market Valuation of IT Innovations: Evidence from the Investment Banking Industry.  In The Proceedings of the Information Systems Education Conference 2005, v 22 (Columbus OH): §3354. ISSN: 1542-7382. (A later version appears in Information Systems Education Journal 4(42). ISSN: 1545-679X.)
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The Stock Market Valuation of IT Innovations: Evidence from the Investment Banking Industry

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Refereed6 pages
Vigdis Boasson    [a1] [a2]
Finance, School of Business
Ithaca College    [u1] [u2]
Ithaca, New York, USA    [c1] [c2]

Emil Boasson    [a1] [a2]
Business Information Systems Department, Master of Science in Administration Program
Central Michigan University    [u1] [u2]
Mount Pleasant, Michigan, USA    [c1] [c2]

It is always a challenge to teach students IT skills and capabilities in a non-IT course setting. However, there is an increasing tendency for IT innovations initiated outside the IT organization. It is thus all the more important for educators from non-IT disciplines not only to keep up with technological development but also to motivate students to learn IT skills in a non-IT course setting such as in a finance classroom. In this paper, we examine the role of IT innovations in a non-IT organization such as an investment bank. We empirically investigate whether IT innovations can bring added market value to the investment banking industry. We find that an investment bank that invests heavily in IT innovations outperforms its industry peers in the stock market. The implication of this finding highlights the need for our educators to motivate our students to gain knowledge of IT even for non-IT disciplines.

Keywords: Information technology, innovation, cost of IT, stock market, IT productivity

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