An event study on the market\u27s reaction on information technology Investment announcements of selected publicly listed companies in the Philippines

The world is currently in the midst of its fourth Industrial Revolution known as “Industry 4.0”, with businesses heavily integrating the use of technology into their operations. Businesses have been capitalizing on this advancement of technology, specifically through the use of Information Technology (IT), to aid in the value creation of their firm. One way in doing so is through the public announcement of their IT investments so as to attract potential investors. The investors’ reactions to such announcements will reflect directly on the company’s stock prices; thus, either increasing or decreasing their firm value. The study aims to ascertain how the Philippine market will react to IT investment announcements through the observation of the abnormal returns of company stock prices. This will be conducted through an event study focusing on such announcements, factoring in certain mediating variables that will further explain the relationship. To specify, the study will utilize Cumulative Abnormal Returns in measuring the effect of the IT investment announcements on stock prices and will integrate the use of Scholes-Williams’ and Dimson’s Beta to eliminate the bias brought on by the lag effect