It Depends on the Size: How Firm Strategic Emphasis on Digital Transformation Predicts Market Capitalization

Whereas digital businesses can have an enormous market value, it remains an open question, whether firms, embarking on a digital transformation journey, can realize similar benefits. Thus, we rely on the signaling theory to study, whether strategic emphasis on digital transformation – i.e., the extent, to which a firm focuses on digital transformation in its strategy – as well as firm size as an indicator of a large resource basis jointly influence market capitalization. To answer this question, we conducted a longitudinal panel data analysis of the largest German publicly listed companies from 2000 to 2017. Our results show, that strategic emphasis on digital transformation leads to a higher market capitalization for larger firms and to a lower market capitalization for smaller firms. Whereas larger firms should further disclose their strategic emphasis on digital transformation, smaller firms should consider sending additional signals to investors, demonstrating their ability to undergo digital transformation successfully

Institutional Shareholders’ Investment Horizons and Corporate IT Capability: An Empirical Evaluation of the U.S. Equity Market

This PhD thesis investigates the relationship between corporate IT capability and institutional investors from two different perspectives. From the first perspective, institutional investors influence companies in their strategies and objectives. From the second, IT capability has considerable firm-internal implications that increase future prospects and firm value, which in turn attracts certain investors. The empirical results illustrate significant differences in ownership structure for firms characterized by superior IT capability. Looking deeper into this phenomenon indicates that the development of a firm’s IT capability is related to subsequent changes in the ownership structure towards more long-term oriented institutional shareholders and vice versa. This dissertation contributes to the understanding of the firm-external influences of institutional investors as well as the capital market implications of firms’ IT capability