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The value‐relevance of financial and non‐financial information for Internet companies
Author(s) -
Graham Carol M.,
Cannice Mark V.,
Sayre Todd L.
Publication year - 2001
Publication title -
thunderbird international business review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.553
H-Index - 37
eISSN - 1520-6874
pISSN - 1096-4762
DOI - 10.1002/tie.1038
Subject(s) - the internet , ordinary least squares , net income , sample (material) , business , relevance (law) , value (mathematics) , financial services , stock market , book value , explanatory power , economics , financial ratio , finance , marketing , econometrics , statistics , paleontology , philosophy , chemistry , mathematics , earnings , chromatography , horse , epistemology , world wide web , computer science , political science , law , biology
This article assesses the extent to which non‐financial measures of Internet usage are incrementallyvalue‐relevant over and above basic financial information across four Internet industry sectors. Usingordinary least squares (OLS) regression analysis we test the extent to which net income, book value,unique users, page views, and hours per user are able to explain stock prices for a sample of 341 firm quartersfor the period Q1: 1999–Q1: 2000. Our results indicate that net income has no ability to explain marketvalues for the pooled sample or for any of the Internet sectors examined. With respect to the non‐financialvariables, we find that for e‐tailers and content/community firms, page views have the greatestexplanatory power. For service companies, unique users have the greatest ability to explain market values, and forinfrastructure companies, none of our non‐financial variables are significant. © 2002 John Wiley &Sons, Inc.