Do shareholders favor business analytics announcements?

Thompson S.H. Teo*, Rohit Nishant, Pauline B.L. Koh

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

47 Citations (Scopus)

Abstract

Despite the growing acceptance of business analytics (BA) as a tool for making smarter business decisions, past research has rarely investigated shareholder reactions to BA announcements. We use signaling theory and resource-based theory (RBT) as our theoretical lens. The results show that BA announcements generate positive abnormal returns, thereby providing empirical evidence that shareholders view BA as beneficial. The results also suggest that characteristics that are more salient to shareholders are rewarded. Specifically, firms implementing BA systems from market-leading vendors obtain more positive stock market reactions compared with other firms. Announcements convey more benefits to overbought stocks than oversold stocks, and generate higher positive return in firms with high sales growth and high return on assets (ROA). Overall, empirical evidence favors signaling theory over RBT.

Original languageEnglish
Pages (from-to)259-276
Number of pages18
JournalJournal of Strategic Information Systems
Volume25
Issue number4
Early online date12 Nov 2016
DOIs
Publication statusPublished - 01 Dec 2016
Externally publishedYes

Bibliographical note

Publisher Copyright:
© 2016 Elsevier B.V.

Keywords

  • Business analytics
  • Event study
  • Resource-based theory
  • Signaling theory

ASJC Scopus subject areas

  • Management Information Systems
  • Information Systems
  • Information Systems and Management

Fingerprint

Dive into the research topics of 'Do shareholders favor business analytics announcements?'. Together they form a unique fingerprint.

Cite this