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Economic Value of Sales Service Technology
Fang Chun Liu,
Rutgers University
Chin S. Ou, National Chung Cheng University
Zahir Irani, Brunel University
Shi M. Huang, National Chung Cheng University
ABSTRACT. The purpose of this paper is to examine the relationship between information technology (IT) investment and the economic value of firms. A well-known sales service technology investment in banking industry is automated teller machine (ATM) investment. However, based on reviewing past research, these seems to be an inconsistent relationship between IT investment and its payoff, termed the “IT paradox”. The empirical results of this paper reveal that a higher intensity of ATM investment will have significantly positive effects on increasing the economic value of banks. Moreover, banks with greater operating efficiency or asset utilization efficiency will also have positively greater impacts on bank economic value. We expect that the convincing results of this study could provide useful implications for scholars interesting in examining other IT or different industries and for practitioners involved in justification of innovative IT investment.
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