Academics and others have claimed that IT is becoming a commodity input, one that can no longer confer a competitive advantage. If IT is becoming a commodity, the role played by IT in most firms should be akin to that played by utilities. We conduct an event-study to determine whether IT is becoming a commodity. We use the volatility of a firm’s stock price to certain macroeconomic news (news about shrinking or expanding demand) to compare the stock price behavior of utility firms with that of IT firms. We find that although the IT industry as a whole is not becoming a commodity, there are some firms within the IT industry that are similar to a utility. In addition, we find that the view that IT can confer a competitive advantage (as perceived by financial markets) was stronger during the dotcom boom period than at other times in the study period (1980-2007).
['Brian L. Dos Santos', 'Zhiqiang Zheng', 'Vijay S. Mookerjee', 'Hongyu Chen']
IS IT REALLY BECOMING A COMMODITY