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The Impacts of Enterprise Resource Planning Systems on Firm Performance: An Empirical Analysis of Chinese Chemical Firms

  • Lu Liu
  • Rui Miao
  • Chengzhi Li
Conference paper
Part of the IFIP — The International Federation for Information Processing book series (IFIPAICT, volume 254)

Abstract

Chinese firms heavily invest in enterprise resource planning systems (ERP) in recent years and expect that ERP can help them gain superior financial performance. Given the high costs and high risk of ERP investments, to quantify the financial benefits of ERP implementation is an important research issue. This paper empirically examines the impacts of ERP implementation on firm performance using the financial data from 50 Chinese chemical firms that implemented ERP. The firms’ abnormal performance during the two-year implementation period and three-year post-implementation period was analyzed based on the guideline of Barber et al. on event studies. The results find no significant performance improvement during the implementation period and the three-year post-implementation period and a decline in performance in the first two years after implementation. However, a slight performance improvement in the third year after implementation may indicate that the financial benefits of ERP may show after a long-term ERP use. These results provide insight for Chinese firms that want to invest in ERP.

Keywords

Enterprise resource planning systems (ERP) Financial performance Chinese chemical firms ROS ROA COGS 

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Copyright information

© IFIP International Federation for Information Processing 2007

Authors and Affiliations

  • Lu Liu
    • 1
  • Rui Miao
    • 1
  • Chengzhi Li
    • 1
  1. 1.School of Economics and ManagementBeihang UniversityBeijingP.R. China

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