The value relevance of network advantages: The case of e-commerce firms
Publication
, Journal Article
Rajgopal, S; Venkatachalam, M; Kotha, S
Published in: Journal of Accounting Research
January 1, 2003
We show that network advantages constitute an important intangible asset that goes unrecognized in the financial statements. For a sample of e-commerce firms, we find that network advantages created by Web site traffic have substantial explanatory power for stock prices over and above traditional summary accounting measures such as earnings and book value of equity. Also, network advantages are positively associated with one-year-ahead and two-year-ahead earnings forecasts provided by equity analysts. When we allow network advantages to be endogenously determined by managerial actions, we find that at least part of the value relevance of network effects stems from the presence of affiliate referral programs and higher media visibility.
Duke Scholars
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Published In
Journal of Accounting Research
DOI
ISSN
0021-8456
Publication Date
January 1, 2003
Volume
41
Issue
1
Start / End Page
135 / 162
Related Subject Headings
- Accounting
- 3502 Banking, finance and investment
- 3501 Accounting, auditing and accountability
- 1502 Banking, Finance and Investment
- 1501 Accounting, Auditing and Accountability
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Rajgopal, S., Venkatachalam, M., & Kotha, S. (2003). The value relevance of network advantages: The case of e-commerce firms. Journal of Accounting Research, 41(1), 135–162. https://doi.org/10.1111/1475-679X.00099
Rajgopal, S., M. Venkatachalam, and S. Kotha. “The value relevance of network advantages: The case of e-commerce firms.” Journal of Accounting Research 41, no. 1 (January 1, 2003): 135–62. https://doi.org/10.1111/1475-679X.00099.
Rajgopal S, Venkatachalam M, Kotha S. The value relevance of network advantages: The case of e-commerce firms. Journal of Accounting Research. 2003 Jan 1;41(1):135–62.
Rajgopal, S., et al. “The value relevance of network advantages: The case of e-commerce firms.” Journal of Accounting Research, vol. 41, no. 1, Jan. 2003, pp. 135–62. Scopus, doi:10.1111/1475-679X.00099.
Rajgopal S, Venkatachalam M, Kotha S. The value relevance of network advantages: The case of e-commerce firms. Journal of Accounting Research. 2003 Jan 1;41(1):135–162.
Published In
Journal of Accounting Research
DOI
ISSN
0021-8456
Publication Date
January 1, 2003
Volume
41
Issue
1
Start / End Page
135 / 162
Related Subject Headings
- Accounting
- 3502 Banking, finance and investment
- 3501 Accounting, auditing and accountability
- 1502 Banking, Finance and Investment
- 1501 Accounting, Auditing and Accountability