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Big data investments in knowledge and non-knowledge intensive firms: what the market tells us

Tingting Zhang (College of Economics and Management, Northwest Agriculture and Forestry University, Yangling, China)
William Yu Chung Wang (University of Waikato, Hamilton, New Zealand)
David J. Pauleen (Massey University, Auckland, New Zealand)

Journal of Knowledge Management

ISSN: 1367-3270

Article publication date: 8 May 2017




This paper aims to investigate the value of big data investments by examining the market reaction to company announcements of big data investments and tests the effect for firms that are either knowledge intensive or not.


This study is based on an event study using data from two stock markets in China.


The stock market sees an overall index increase in stock prices when announcements of big data investments are revealed by grouping all the listed firms included in the sample. Increased stock prices are also the case for non-knowledge intensive firms. However, the stock market does not seem to react to big data investment announcements by testing the knowledge intensive firms along.

Research limitations/implications

This study contributes to the literature on assessing the economic value of big data investments from the perspective of big data information value chain by taking an unexpected change in stock price as the measure of the financial performance of the investment and by comparing market reactions between knowledge intensive firms and non-knowledge intensive firms. Findings of this study can be used to refine practitioners’ understanding of the economic value of big data investments to different firms and provide guidance to their future investments in knowledge management to maximize the benefits along the big data information value chain. However, findings of study should be interpreted carefully when applying them to companies that are not publicly traded on the stock market or listed on other financial markets.


Based on the concept of big data information value chain, this study advances research on the economic value of big data investments. Taking the perspective of stock market investors, this study investigates how the stock market reacts to big data investments by comparing the reactions to knowledge-intensive firms and non-knowledge-intensive firms. The results may be particularly interesting to those publicly traded companies that have not previously invested in knowledge management systems. The findings imply that stock investors tend to believe that big data investment could possibly increase the future returns for non-knowledge-intensive firms.



Zhang, T., Wang, W.Y.C. and Pauleen, D.J. (2017), "Big data investments in knowledge and non-knowledge intensive firms: what the market tells us", Journal of Knowledge Management, Vol. 21 No. 3, pp. 623-639.



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