Market reaction to enterprise applications: a multicultural perspective

Purpose - – This paper aims to identify the relationship between national culture, enterprise application (EA) implementations and firm value for a sample of the largest and most actively traded firms in Japan, the United Kingdom and the USA. The study seeks to contribute to a better understanding of the cultural traits that play a role in successful technological innovation. Design/methodology/approach - – Using 11 years of price and accounting data, as well as corporate announcements from English- and Japanese-speaking sources, this study applies event study methodology and fixed-effects regressions to a sample of international adopters of enterprise resource planning (ERP), customer relationship management (CRM), supply chain management and firm-specific applications. Findings - – The results show a country-related contrast in the way investors perceive value in EAs. Investors with national cultures that are more collectivist perceive their firms to be well-prepared to extract value from large-scale technologies. In contrast, individualistic cultures seem to face more implementation challenges. Research limitations/implications - – Although the study provides statistically significant results, a larger sample of countries and enterprise systems adopters would further enhance a generalization of results. Practical implications - – The empirical results provide evidence of the national culture traits that seem to increase the likelihood of success in enterprise systems implementations as seen from the perspective of actual investors. Originality/value - – The empirical study of how multiple EAs (ERP, SCR, CRM and SPECIFIC) and national culture differences interact with a market-based metric of value (stock market prices), while also using an international sample of firms from three distinct regions, is novel to the existent literature.