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ISSN No:-2456-2165
Abstract:- This study's major goal is to find out how A. Pertaining IT Investments to q
information technology (IT) skills affect business As mentioned earlier, the majority of the literature on IT
performance and value. Various approaches to and company performance has focused on bearing on IT
measuring company performance have been widely used investments to accounting measures of firm overall
in scientific studies. This shows a variety of thoughts performance [4], [5] A excellent exception is a study by [6]
about the company's performance; the company's which hired a financial marketplace-based technique for
performance is important to measure its value. This paper comparing IT investments. the use of the event study method,
tries to re-explain Tobinsq as an indicator of company the authors analyzed the effect of announcements of IT
performance measurement. So that until now Tobins'q is investments on a company’s stock charges and determined
still the main choice for researchers as an indicator of that even as announcements of modern IT investments tended
company performance measurement. to definitely impact the market price of corporations,
investments in noninnovative IT spending tended to have
Keywords:- Company, Information Technology, Tobins’q. zero or terrible effect on stock fees. The study becomes
important in establishing that capital markets have been
I. INTRODUCTION responding to statistics about IT investments, and
consequently offering some justification for the use of
In this modern era, the development of information market-based measures for comparing IT investments. The
technology is growing rapidly. Various companies are trying only preceding try at using Tobin’s q as an outcome degree is
to maximize the development of information technology as reported in [7], investing in information technology (IT
much as possible. Not even a few companies make spending) can deliver benefits and competitive advantages for
information technology a competitive advantage for the the company [8]. IT spending is expected to provide a
company, [1]. Information systems include information competitive advantage that can be expected because using IT
technology, which is the term for the technology used to spending can improve company performance and provide
transmit and process information, [2]. This is evidenced by more benefits. The importance of information technology to
many companies using information technology to increase information technology in business strategy has resulted in
efficiency, improve customer relationships, save costs, and the importance of investing in news technology (IT
create new products and businesses. For the business world, Spending) to support business activities. The theory of capital
Even though the business partner is in another country, the expenditures is in the form of assets that can be claimed as
influence of information technology offers convenience and investments. A central question, then, is: Why is the value
smoothness in carrying out interests. Utilizing free, always- created from IT investments better reflected in a measure
available video conferencing or internet calls can help you get such as the q? We summarize the arguments that can be made
around this problem. As information technology becomes in support of this hypothesis in two basic categories: Both of
more advanced, the business sector is likewise impacted, these contributions—(a) to long-term firm performance and
leading to implementation of numerous information (b) to firm intangible value—are better represented by the q
technology-based business strategies. Corporate strategies ratio. The effect of the origin of the investment is Profitability
based on information technology are crucial to succeeding in which is incorrectly reflected using stock prices. The stock
business rivalry. The direction and scope of the company's price reflection has resulted in investors being able to convey
information technology-based business plan will benefit it in an assessment of a company. A telecommunications company
the long run. [3]. These benefits can be through existing listed on impact exchanges across Southeast Asia is used in
resources in a very supportive environment to meet market this study's reexamination of the original study's findings
needs and meet the expectations of stakeholders or investors. before using Tobin's Q to test the effect of IT spending on
Information technology is not just business support, it has firm value.
become an integrated part of running the company's business.
Businesses are prompted to add products and services by the
increasingly competitive environment in order to retain and
develop their consumer base. The corporation itself also
raised its investment in capital and merchandise.