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 language | English |
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Pages (from-to) | 259-276 |
Number of pages | 18 |
Journal | Journal of Strategic Information Systems |
Volume | 25 |
Issue number | 4 |
Early online date | 12 Nov 2016 |
DOIs | |
Publication status | Published - 01 Dec 2016 |
Externally published | Yes |
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