Impact of e-Business initiatives on firm value - Annotated Bibliography Example

Comments (0) Cite this document
The scholars point out that though more and more companies are entering into e-business, it is still unclear as to whether these companies actually profit from the said…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.3% of users find it useful
Impact of e-Business initiatives on firm value
Read TextPreview

Extract of sample "Impact of e-Business initiatives on firm value"

Impact of e-Business Initiatives on Firm Value: Article Review Impact of e-Business Initiatives on Firm Value: Article Review
The work by Lee, Cho, and Lee (2002) tried to answer the ambiguity existing in the e-business world. The scholars point out that though more and more companies are entering into e-business, it is still unclear as to whether these companies actually profit from the said initiative. In order to answer this query, the scholars look into the cumulative abnormal returns for 782 e-businesses from the Korean capital markets and reach the conclusion that ‘e-business potential’ results in an increase in firm value (Lee, Cho, and Lee, 2002).
The first finding in the study is that capital markets show a positive response when firms come up with a e-business initiative. The study reveals that the cumulative abnormal return for such initiatives ranges from 3.5% to 4.74% in the first five days. Another significant finding is that the abnormal returns are higher in the e-business initiatives of business-to-consumer firms than that of business-to-business firms. The explanation for this claim is found in the ‘firm size effect’. It is found that higher abnormal returns are created in small-sized firms. As business-to-business firms are generally bigger than business-to-customer firms, it is claimed that the latter will gain more abnormal returns in the e-business initiatives.
Thus, putting an end to the long ambiguity regarding the profitability of e-business initiatives, the study came up with the finding that it is highly beneficial to the firms because it offers future benefits to the firms in the form of increased market values. The reason, according to the scholars, is that such aggressive steps are often considered as futuristic by stakeholders and other public. Thus, such firms escape the usual bandwagon effect.
Admittedly, there were previous studies which proved that e-business initiatives positively affect the value of firms. However, the present study stands apart for showing the various effects of e-business initiatives based on the nature of the initiative and the nature of the business. The strength of the study lies in the fact that it investigates the issue in two different capital markets; namely KSE and KOSDAQ. However, there are some findings which contradict the findings in American market. For example, while the e-business expansion of an established e-business company makes more positive effect than the e-business initiative of a non-internet firm in the U.S, the opposite is true in Korea. Similarly, though the study hypothesized that the abnormal returns are linked to the layer to which the e-business form belongs, it could not prove the same in KOSDAQ –listed firms.
Thus, the study poses certain challenges for future research in the fact that it has found some differences between the U.S and Korean market in the way e-business initiatives are received by the public and how firms profit. The study seems limited in the fact that it fails to provide an explanation for the same. Moreover, it has failed to explain why the layer does affect abnormal returns in KSE but not in KOSDAQ. However, the study is rather groundbreaking in the fact that it has further elaborated the matter of e-business initiative profitability showing that factors like the nature of the firm, its layer, and the size of the firm all have some effect on the way the e-business initiative will affect the firm value.
Lee, H. G. Cho, D. H & Lee, S. C. (2002). Impact of e-Business initiatives on firm value. Electronic Commerce Research and Applications 1: 41-56. Elsevier Science B.V. Read More
Cite this document
  • APA
  • MLA
(“Impact of e-Business initiatives on firm value Annotated Bibliography”, n.d.)
Impact of e-Business initiatives on firm value Annotated Bibliography. Retrieved from
(Impact of E-Business Initiatives on Firm Value Annotated Bibliography)
Impact of E-Business Initiatives on Firm Value Annotated Bibliography.
“Impact of E-Business Initiatives on Firm Value Annotated Bibliography”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Impact of e-Business initiatives on firm value

Impact of E-commerce on Business Systems a revenue-earning medium focused around the key elements of any business venture – market, customers, suppliers and resources. Various attempts have been made to make specific distinctions of the e-business models that exist across the globe but this has resulted in new theories and propositions. But simply understood an e-business model implies to an approach taken by a company to become a profitable venture on the electronic media commonly referred to as the electronic commerce. It spells out how a firm generates revenue by specifying the position of the firm in the value chain....
26 Pages(6500 words)Dissertation

Impact E-Commerce in business world

.... In this paper, we shall see how to impact Electronic commerce in Business world. E-commerce has shown tremendous growth in products that make part of daily collection and consumers normally waste a lot of money on them. This is due to the proliferation of Internet stores and shopping, which is growing daily on the Internet. The possibilities are launching high efficiency and successful company linked in the work of electronic commerce on the Internet by adding a good promotion. E-Commerce refers to: business trading with other business on the internet (Dumitrache, 2010). In 2010, Dumitrache showed that E- Commerce can...
4 Pages(1000 words)Essay

Capital structure and firm value

...?Capital Structure & Firm Value Table of Contents 3 Introduction 4 Modigliani & Miller Theory 4 Pecking-order theory 7 Trade-Off Theory 8 Setting target leverage levels 12 Managing Short term capital structure 14 Link between credit ratings and capital structure 14 Financing long term investment 16 Financial Engineering and Firm Value 17 Capital Structure Affecting Firm’s Business and Financial Risks 18 Conclusion 19 Reference 20 Bibliography 24 Abstract The capital structure forms an integral part of the financing policies of the company. There have been various theories on capital structure explaining the relevance and irrelevance of capital structure such as trade-off theory, Modigliani & Miller theory, pecking order theory etc... and...
23 Pages(5750 words)Literature review

E-Business and Value Chains

.... As such, this report seeks to critically analyse the extent to which the internet has impacted on the operations of PC World Business through implementation of e-business strategy such as e-marketing. The report focuses on impacts of e-marketing on PC World Business and attempts to address the following issues: 1 How has the organisation’s business changed with the development of the internet? 2 What new opportunities have been there for the organisation to create additional customer value? 3 Assessment of the strengths and weaknesses of the organisation’s current use...
8 Pages(2000 words)Essay

E-business and Value Chain

...? FedEx: E-Business and Value Chain FedEx, formerly Federal Express is a US based logistical services company employing about 100,000 employees globally. The company provides transportation, business and e-commerce services to organisations and individuals. Founded by Fredrick W. Smith in 1971, the company had the initial objective of coming up with a remedy to inefficient air freight distribution system (FedEx 2012). Since then, the company has gained reputation for revolutionising business practices, reliability and speed. This paper explains the firm’s e-business...
8 Pages(2000 words)Essay

E-Business and Value Chains

...Group Inc (IGI) Gunasekaran, A., 2002. E-commerce and its impact on operations management. Int. J. production Economics. 75: 185-197. Gupta, J. 2004. Creating Knowledge Based Organizations. Hershey, PA: Idea Group Inc (IGI) Hubner, U. and Elmhorst, M. 2007.EBusiness in Healthcare: From Eprocurement to Supply Chain Management. New York: Springer Jennifer, P. and Wei, J. 2005. Value based E-business in the apparel retail industry. Available from [Accessed April 21, 2012] pg2 Jespersen, K.R. Usage of ICT tools in the New product Development: Creating User-involvement. Available from:...
8 Pages(2000 words)Essay

E-Business Master Case Study

...a product/ service Up today, the firm's managers have tried to keep the firm's performance almost intact from the international crisis; in the feature the ability of the firm to face the threats developed would be evaluated in accordance with the criteria - social and commercial - developed by then. 1. Means of capturing information for use in e-business processes The use of business tools by modern organisations is necessary in order for the organisational operations to be completed on time. In accordance with Wu et al. (2003, 245) 'across industries, firms have adopted e-business...
13 Pages(3250 words)Case Study

Capital Structure and Firm Value

...or the cash flows are not wasted on bad projects. Based on the abovementioned assumptions neither the shareholders receiving dividends nor the firms declaring them are adversely impacted by high or low dividend declarations of the firms (Leonard N. Stern School of Business, n.d.). Implications of MM dividend irrelevance proposition If the dividends are assumed to be irrelevant then the firms spend considerable amount of resources on an issues that is of little significance to the shareholders. This gives rise to a number of propositions. One is that there is no change in the value of equity with any changes in the dividend policy. It...
13 Pages(3250 words)Assignment

E-business and value chain

...Table of Contents Executive Summary 3 Introduction 4 Google Inc. 5 Value Propositions 5 2 Segments 5 3.Channels 6 4 Relationships6 5.Key Activities 7 6.Key Resources 7 7.Key Partners 7 8.Cost Structures 8 9.Revenue Generation 8 9 1.Value Propositions 9 2.Customer Segments 10 3.Channels 10 4.Customer Relationships 10 5.Key Activities 10 6.Key Resources 11 7.Key Partners 11 8.Cost Structures 11 9.Revenue Generation 12 12 1.Value Propositions 13 2.Customer Segments 13 3.Channels 14 4.Customer Relationships 14 5.Key Activities 14 6.Key Resources 15 7.Key Partners 15 8.Cost Structures 15 9.Revenue Generation 16 References 16 Appendix 19 Executive Summary The report has...
12 Pages(3000 words)Book Report/Review

E-business and value chain

...E-Business and Value Chain Summary This project is based on analysis of e-business models employed in the operations of Amazon, QXL ricardo plc and Daum. Amazon is analyzed as a storefront e-business model of which allows the company to provide different services directly to users of their website. It is also noted that Amazon operates a shopping cart system used in selection of the most preferred merchandise. Amazon’s core value proposition is based on provision of easy access to specific goods and services through personalization of customer information, which is stored in the company database for the...
12 Pages(3000 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Annotated Bibliography on topic Impact of e-Business initiatives on firm value for FREE!

Contact Us