Bruce Dehning
Chapman University
Vernon J. Richardson
University of Kansas
Andrew Urbaczewski
Washington State University
John D. Wells
Washington State University
Abstract: This study re-examines the value relevance of e-commerce announcements using an event study methodology. Event studies have become an increasingly popular tool for IS research by giving researchers a tool to measure the notoriously elusive value of IT. We find evidence that the traditional event study methodology may not provide an accurate measure of abnormal returns during periods of high market volatility, and propose an alternative methodology. Using the alternative methodology, we find evidence of positive abnormal returns for e-commerce announcements made in the fourth quarter of 1998, but no abnormal returns to e-commerce announcements made in the fourth quarter of 2000. We also find significant differences in value depending on the type of e-commerce initiative. In 1998 e-commerce initiatives with a digital product were valued significantly less than e-commerce initiatives with a tangible product. In 2000 this situation had reversed.
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