This study proposes an unconventional partial adjustment valuation approach, as a comparison to stochastic production frontier approach, to evaluate the business values of information technology and E-commerce. Based on the different settings of the speeds of adjustment, two different cases, constant case and dynamic case, are conducted and compared. With the more realistic model design, we can investigate and compare the business values of information technology and E-commerce with not only the constant but also the time-varying dynamic setting empirically. The empirical results indicate that the adoptions of information technology and E-commerce contribute to operational performances positively in most cases, but the power differs depending on the different industries.
- Information technology
- dynamic speeds of adjustment
- partial adjustment valuation approach
- theory of partial adjustment