The Dot Com Effect Revisited: an Event Study of the Value Propositions of Ec Initiatives on the Market Value of Firms

The value drivers of electronic commerce are not well understood. Based on pioneering work in the field of information technology value, we propose and empirically test a general theory of electronic commerce value. Specifically, we propose that the important factor to consider is the creation of intangible, electronic commerce technology complementing assets. We use the event study methodology to test the hypothesis that organizations that are most easily able to create and deploy these intangible assets will derive the greatest return for investors. Not only do we use the short run event study common to the information systems literature, but we also apply new techniques for long run event study analysis hitherto unused in information systems research. Our results show support for the theory of the primacy of intangible assets in determining returns to electronic commerce initiatives. We further supplement our analysis by evaluating returns through the lens of electronic commerce business models. The results of this analysis suggest that consideration of intangible assets explains return to electronic commerce initiatives better than business model considerations.