Volume 4

Volume 4, Number 42

July 27, 2006

8 pages445 K bytes

The Stock Market Valuation of IT Innovations: Evidence from the Investment Banking Industry

Vigdis Boasson
Ithaca College
Ithaca, NY 14850 USA

Emil Boasson
Central Michigan University
Mount Pleasant, MI 48858 USA

Abstract: It is always a challenge to teach students IT skills and capabilities in a non-IT course setting. However, there is an increasing tendency for IT innovations initiated outside the IT organization. It is thus all the more important for educators from non-IT disciplines not only to keep up with technological development but also to motivate students to learn IT skills in a non-IT course setting such as in a finance classroom. In this paper, we examine the role of IT innovations in a non-IT organization such as an investment bank. We empirically investigate whether IT innovations can bring added market value to the investment banking industry. We find that an investment bank that invests heavily in IT innovations outperforms its industry peers in the stock market. The implication of this finding highlights the need for our educators to motivate our students to gain knowledge of IT even for non-IT disciplines.

Keywords: Information technology, innovation, cost of IT, stock market, IT productivity

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Recommended Citation: Boasson and Boasson (2006). The Stock Market Valuation of IT Innovations: Evidence from the Investment Banking Industry. Information Systems Education Journal, 4 (42). http://isedj.org/4/42/. ISSN: 1545-679X. (A preliminary version appears in The Proceedings of ISECON 2005: §3354. ISSN: 1542-7382.)