Electronic commerce investments, the resource-based view of the firm, and firm market value

Ferguson, Colin, Finn, Frank and Hall, Jason (2005) Electronic commerce investments, the resource-based view of the firm, and firm market value. International Journal of Accounting Information Systems, 6 1: 5-29. doi:10.1016/j.accinf.2004.08.001

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Author Ferguson, Colin
Finn, Frank
Hall, Jason
Title Electronic commerce investments, the resource-based view of the firm, and firm market value
Journal name International Journal of Accounting Information Systems   Check publisher's open access policy
ISSN 1467-0895
Publication date 2005-03
Year available 2005
Sub-type Article (original research)
DOI 10.1016/j.accinf.2004.08.001
Volume 6
Issue 1
Start page 5
End page 29
Total pages 25
Editor S. G. Sutton
Place of publication New York, NY, U.S.A.
Publisher Elsevier Science
Collection year 2005
Language eng
Subject C1
350211 Innovation and Technology Management
729901 Technological and organisational innovation
Abstract Firms have embraced electronic commerce as a means of doing business, either because they see it as a way to improve efficiency, grow market share, expand into new markets, or because they view it as essential for survival. Recent research in the United States provides some evidence that the market does value investments in electronic commerce. Following research that suggests that, in certain circumstances, the market values noninnovative investments as well as innovative investments in new products, we partition electronic commerce investment project announcements into innovative and noninnovative to determine whether there are excess returns associated with these types of announcements. Apart from our overall results being consistent with the United States findings that the market values investments in electronic commerce projects, we also find that noninnovative investments are perceived as more valuable to the firm than innovative investments. On average, the market expects innovative investments to earn a return commensurate with their risk. We conclude that innovative electronic commerce projects are most likely seen by the capital market as easily replicable, and consequently have little, if any, competitive advantage period. On the other hand, we conclude from the noninnovative investment results that these types of investments are seen as being compatible with a firm's assets-in-place, in particular, its information technology capabilities, a view consistent with the resource-based view of the firm.
Keyword Electronic commerce
Resource-based theory
Replicability
Competitive advantage period
Innovative investments
Noninnovative investments
Firm market value
Event study
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status UQ
Additional Notes Available online 3 February 2005.

 
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Created: Wed, 15 Aug 2007, 05:24:03 EST