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臺大管理論叢
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they test the impact of IT on the demand of deposits (and loans). Thus, their conclusion is
that IT capital does not appear to earn extraordinary profit or loss. In other words, it is not a
value-enhancing input.
Summarizing what has been documented from Beccalli (2007) and Martin-Oliver and
Salas-Fumás (2008), one puzzling question emerges: Why would banks continue to spend so
much money on IT and emphasize the crucial role of IT in improving their performance
while academic literature provides the opposite or mixed evidence? In this paper, we suggest
that the choice of dependent variables in previous studies serves as one possible explanation
for the failure to find the positive impact of IT expenditure on banks’ performance. More
specifically, when contemporaneous accounting and productivity measures are used, two
potential problems emerge. First, such measures are not able to fully incorporate IT benefits
that have not been transformed into “physical” inflows, such as customer satisfaction.
Second, it may take some time for the positive effects of IT expenditure to be realized. For
example, assume that a bank adopts one advanced and user-friendly platform for its Internet
banking service in Year 1. It may cost a lot at the introduction stage, including IT consulting
fees and up-front development spending. The increased IT spending may last for two or three
years, whereas the benefits may not begin to emerge until the third or fourth year. That is,
customers need time to get acquainted with an upgraded platform before increasing their
consumption. If the platform can replace some labor costs, it is also not possible for banks to
immediately lay off unnecessary staff. By contrast, as a bank consistently invests in its IT
capital to meet customers’ needs and strengthen the internal processing system, the sound
customer relationships together with reduced labor costs will be observed and appreciated by
the capital market. In other words, it will be reflected in the bank’s market price.
Accordingly, we assume that the market value is more appropriate as the dependent variable
because it summarizes the expected benefits of IT spending, both physical and intangible,
from contemporaneous to subsequent periods in a timely manner. In short, we propose the
following hypotheses.
H1: IT expenditures are positively related to a firm’s market values.
Although IT expenditure gives rise to banks’ long-term economic benefits, it is unclear
whether investing in IT with large amounts is a value-enhancing strategy. As mentioned
before, banks have continued to emphasize that investing substantially greater resources in
technological improvements than peers is critical in maintaining customers’ satisfaction (as