Information Technology and Financial Performance: The Impact of being an Internet-Dependent Firm on Stock Returns

摘要

The choice of a particular technology to implement a firm's business strategy may impact the firm's market performance. This study assesses the impact of being an Internet-dependent firm on a firm's stock valuation. The empirical results indicate that in a booming economy. Internet-dependent firms have lower excess returns than non-Internet firms. These high returns can be explained by the fact that in such an economy, Internet stocks trade at relatively higher prices than non-Internet stocks. Therefore, choosing a particular technology to implement business strategy may have a significant impact a firm's stock performance.