Information technology investment announcements and market value in transition economies: Evidence from Warsaw Stock Exchange

Abstract

This study examines stock market reactions to announcements of information technology investments in Poland, an emerging market and transition economy. Based on 66 announcements by companies traded at the Warsaw Stock Exchange in the period 2002–2009, our study confirms some previously published results from studies conducted primarily in highly developed markets, but also shows that specific characteristics of announcements play a more important role than has been commonly assumed. Our results indicate that investors in Poland react more positively if systems are acquired from global rather than local vendors. Announcements about completed projects are more positively received than announcements about planned or in-progress projects. Furthermore, announcements in Polish, targeted at existing shareholders, are more likely to be received positively than similar announcements released in English, targeting global investors.