The Effect of Internet Channels on the Market Value: AR and EVA Perspectives

Authors

  • Hung-Jen Tu Providence University
  • Jia-Jeng Hou National Chiayi University

DOI:

https://doi.org/10.7903/cmr.2760

Abstract

The emergence of the Internet has forced a wealth of firms to explore a new form of channels of distribution, i.e., Internet channels. Nevertheless, empirical studies evaluating the values to firms from the adoption of Internet channels are limited. In order to fill in the literature gap, an empirical study to assess the effect of Internet channels on the market value was conducted in Taiwan. By applying event study methodology, accompanied with Economic Value Added, the research examined firms’ market values after adding Internet channels. The results showed that the magnitudes of the CAARs were uniformly positive and significant in [-10,+10] windows; the relationship between EVA before/after introducing Internet channels and abnormal returns were positive; EVA after adding Internet channels dominated EVA before adding Internet channels in explaining abnormal returns. In conclusion, the research has provided insights into the performance implications of Internet channels for firms. Keywords: Internet Channels, Market Value, Economic Value Added, Abnormal Return.

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Published

2011-09-25

How to Cite

Tu, H.-J., & Hou, J.-J. (2011). The Effect of Internet Channels on the Market Value: AR and EVA Perspectives. Contemporary Management Research, 7(2). https://doi.org/10.7903/cmr.2760

Issue

Section

Accounting and Finance