A Note On Market Reactions To Relatively Recent ERP Announcements

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Benjamin P. Foster
Alan S. Levitan

Keywords

Enterprise Resource Planning, ERP

Abstract

Prior capital research (Hayes et al., 2001) indicated that the market reacted positively to Enterprise Resource Planning (ERP) implementation announcements from 1990 to 1998. Using more recent data, this study examines whether the market continued to react positively to ERP announcements in light of negative publicity surrounding ERP implementations during 1999. Our evidence is less than conclusive than that found by the earlier study, but our data indicate that the market does still react positively to ERP announcements. We conclude that market participants still believed that the expected benefits exceeded the perceived risks associated with ERP implementation of large market share systems. The results of this study should be useful to managers seeking to increase their companies shareholder wealth.

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