Electronic commerce investments, the resource-based view of the firm, and firm market value

Firms have embraced electronic commerce as a means of doing business, either because they see it as a way to improve efficiency, grow market share, expand into new markets, or because they view it as essential for survival. Recent research in the United States provides some evidence that the market does value investments in electronic commerce. Following research that suggests that, in certain circumstances, the market values noninnovative investments as well as innovative investments in new products, we partition electronic commerce investment project announcements into innovative and noninnovative to determine whether there are excess returns associated with these types of announcements. Apart from our overall results being consistent with the United States findings that the market values investments in electronic commerce projects, we also find that noninnovative investments are perceived as more valuable to the firm than innovative investments. On average, the market expects innovative investments to earn a return commensurate with their risk. We conclude that innovative electronic commerce projects are most likely seen by the capital market as easily replicable, and consequently have little, if any, competitive advantage period. On the other hand, we conclude from the noninnovative investment results that these types of investments are seen as being compatible with a firm's assets-in-place, in particular, its information technology capabilities, a view consistent with the resource-based view of the firm.

Financial and economic performance of long-rotation hardwood plantation investments in Queensland, Australia

In Queensland, Australia, there is presently a high level of interest in long-rotation hardwood plantation investments for sawlog production, despite the consensus in Australian literature that such investments are not financially viable. Continuing genetics, silviculture and processing research, and increasing awareness about the ecosystem services generated by plantations, are anticipated to make future plantings profitable and socio-economically desirable in many parts of Queensland. Financial and economic models of hardwood plantations in Queensland are developed to test this hypothesis. The economic model accounts for carbon sequestration, salinity amelioration and other ecosystem service values of hardwood plantations. A carbon model estimates the value of carbon sequestered, while salinity and other ecosystem service values are estimated by the benefit transfer method. Where high growth rates (20-25 m(3) ha(-1) year(-1)) are achievable, long-rotation hardwood plantations are profitable in Queensland Hardwood Regions 1, 3 and 7 when rural land values are less than $2300/ha. Under optimistic assumptions, hardwood plantations growing at a rate of 15 in 3 ha-1 year 1 are financially viable in Hardwood Regions 2, 4 and 8, provided land values are less than $1600/ha. The major implication of the economic analysis is that long-rotation hardwood plantation forestry is socio-economically justified in most Hardwood Regions, even though financial returns from timber production may be negative. (c) 2003 Elsevier B.V. All rights reserved.