Shareholder reaction to firm investments in the capability maturity model: An event study

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This study investigates the differential effects of successfully completed capability maturity model (CMM) appraisals on a firm's short-term and long-term stock performance. Our results indicate a positive share price response on the days surrounding the appraisal date for the stocks of companies obtaining the CMM appraisal. Stocks of firms successfully completing CMM appraisals generally outperform the S&P 500 index over longer-holding periods, although they do not outperform a matched sample. We find support that firms from the information technology industry, firms that are larger, firms of higher CMM maturity levels, and firms completing multiple appraisals are more likely to experience both short-term and long-term benefits from their investing in the CMM.

Original languageEnglish (US)
Pages (from-to)170-190
Number of pages21
JournalEuropean Journal of Information Systems
Issue number2
StatePublished - Mar 2013


All Science Journal Classification (ASJC) codes

  • Information Systems
  • Library and Information Sciences

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