Do Green IT announcements improve market value of firms?

Abstract

With the increasing announcement of green IT initiatives by firms, there is a need to investigate the financial impact of these announcements on a firm's market value. Invoking the resource-based view, this study analyzes the impact of specific types of green IT announcements on a firm's market value using the event study methodology. Our sample comprises 160 news reports of green IT initiatives by publicly traded firms over a 6-year period. The findings indicate that green IT announcements result in a 0.38% average cumulative abnormal increase in stock price over a 2-day event window. The results further reveal that there are positive relationships between the green IT announcements on "sustainable products and services" and the use of "collaboration" technologies with the cumulative abnormal returns. Implications for research and practice are discussed.