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Sat, Oct 8, 11:00 - 11:25, Senate B     Paper (refereed)
Recommended Citation: Boasson, E and V Boasson.  IT Innovations in IT Industries: Does IT Pay Off?  In The Proceedings of the Information Systems Education Conference 2005, v 22 (Columbus OH): §3353. ISSN: 1542-7382. (A later version appears in Information Systems Education Journal 4(41). ISSN: 1545-679X.)
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IT Innovations in IT Industries: Does IT Pay Off?

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Refereed7 pages
Emil Boasson    [a1] [a2]
Business Information Systems Department, Master of Science in Administration Program
Central Michigan University    [u1] [u2]
Mount Pleasant, Michigan, USA    [c1] [c2]

Vigdis Boasson    [a1] [a2]
Finance, School of Business
Ithaca College    [u1] [u2]
Ithaca, New York, USA    [c1] [c2]

In the classroom, students tend to ask the question: why do we need to study information technology (IT)? In the real business world, corporate decision-makers constantly ask the question: why do we need to invest in IT? Does it pay off? In this paper, we investigate how the stock market values a firmís IT innovations in order to gain competitive advantage. In other words, we examine the role of IT innovations in the stock market valuation of a firmís expected future cash flows. Our findings indicate that firms that are IT innovators are valued higher than their industry competitors. Clearly, IT innovations seem to pay off in the stock market. In this way, we show that learning IT skill sets in the classroom is important for undertaking IT innovations in the real business world.

Keywords: information technology, IT innovation, IT education, market value, intangible assets

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