As Information Technology (IT) continues to be a major driving force for innovation, productivity, and economic growth, it is still crucial to understand how IT affects and transforms firms and industries - the benefits it creates as well as the risks it causes. This dissertation consists of three essays, and explores the nature and value of IT, as a production input, as an event that may contain informational content, and as an investment decision that can change firms' risk profiles. The first essay discusses IT's contribution to productive capacity - the maximum sustainable level of output that a production unit may achieve by increasing its short-run inputs to a limit. The second essay examines the informational nature of IT investment announcements - whether they provide new information to investors. The third essay investigates the risky nature of IT investment announcements - how they affect firm risk perceived by investors.