Going Digital: Implications for Firm Value and Performance
Going Digital: Implications for Firm Value and Performance
dc.contributor.author | Srinivasan, Suraj | |
dc.contributor.author | Chen, Wilbur | |
dc.date.accessioned | 2020-12-01T00:49:14Z | |
dc.date.available | 2020-12-01T00:49:14Z | |
dc.date.issued | 2020-08-13 | |
dc.description.abstract | We examine firm value and performance implications of the growing trend of non-technology companies adopting digital technologies, using a measure based on the disclosure of digital words in the business description section of 10-Ks. Digital adoption is associated with a market-to-book ratio 8-26% higher than industry peers. Part of the differences in market-to-book is explained by accounting capitalization restrictions, which we estimate to explain roughly 15% of the differences. Portfolios formed on digital disclosure earn a DGTW-adjusted return of 36% over a 3-year horizon and a monthly alpha of 57-basis-points. We also find significant increases in asset turnover conditional on digital activities, while also finding significant declines in margins and sales growth. | |
dc.identifier.uri | http://hdl.handle.net/10125/70488 | |
dc.subject | Digital Adoption | |
dc.subject | Valuation | |
dc.subject | Return Predictability | |
dc.title | Going Digital: Implications for Firm Value and Performance |
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