The Impact of Big Data Investment on Firm Value

Purpose – The purpose of this research is to provide insights that can be used for deliberate decision making around chal-lenging big data investments by measuring the economic value of such big data implementations. Research design, data, and methodology – We perform em-pirical research through an event study. To this end, we meas-ure actual abnormal returns of companies that are triggered by their investment announcements in big data, or firm size in-formation, during the three-year research period. The research period targets a timeframe after the introduction of big data at Korean firms listed on the Korea stock markets. Results – Our empirical findings discover that on the event day and the day after, the abnormal returns are significantly positive. In addition, our further examination of firm size impacts on the abnormal returns does not show any evidence of an effect. Conclusions – Our research suggests that an event study can be useful as an alternative means to measure the return on in-vestment (ROI) for big data in order to lessen the difficulties or decision making around big data investments.