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Human or System Strategy for Effective Knowledge Management: Based on the Event Study Methodology  

Choi, Byoung-Gu (University of Sydney, School of Information Technologies)
Publication Information
Asia pacific journal of information systems / v.14, no.3, 2004 , pp. 57-75 More about this Journal
Abstract
The knowledge management is increasingly an important strategic weapon for sustaining competitive advantage of firms. Firms are undertaking knowledge management initiatives and making significant investments. However, there is relatively little empirical support for the impact of knowledge management on performance of firms. Understanding of the impact of knowledge management, this paper explores how knowledge management strategy influences firms' market value. We examine this issue using event study methodology and evaluate the cumulative abnormal returns for knowledge management strategy announced by firms from 1998 to 2002. The results show that firms' announcements of knowledge management strategy are positively related with firms' market value. Specially, dynamic style-which emphasizes both (i) knowledge reusability through information technologies and (ii) knowledge sharing through informal discussions among employees-has higher performance. This outcome presents empirical support to argument that the emphasis on both tacit and explicit knowledge results in better market value.
Keywords
KM Strategy; Event Study Methodology; Market Value;
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