How Do Investments in Enterprise Application Integration Drive Stock Prices?

Enterprise application integration (EAI) technologies are critical to making diverse corporate computer systems work together properly, and as such should be expected to have a positive effect on business value. The event study presented and discussed in this paper seeks to ascertain the relevance of EAI to achieving tangible benefits from the investors´ perspective by examining 81 corporate announcements of EAI implementations. The analysis of our data however suggests that EAI investments are not always greeted as good news by investors and do not generally result in positive stock price reactions. Furthermore, the data suggests negative market reaction to financially distressed companies investing in EAI. Particularly in a bear market, investors seem to view an investment in EAI more as a burden than as an asset