Incremental performance of an eChannel addition

Lee Yung-Hsin (Department of Business Administration, Hsing Wu University, New Taipei City, Taiwan)
Shui-Lien Chen Lily (Department of Management Sciences, Tamkang University, New Taipei City, Taiwan)
Fei Chen I (Department of Management Sciences, Tamkang University, New Taipei City, Taiwan)
Lin Bing-Huei (Department of Finance, National Chung-Hsing University, Taichung, Taiwan)

Internet Research

ISSN: 1066-2243

Publication date: 28 January 2014

Abstract

Purpose

The purpose of this paper is to use the Black-Scholes-Merton option pricing model to evaluate the incremental performance of an eChannel addition.

Design/methodology/approach

Data were collected from 53 Taiwan financial services firms. In total, 33 of them introduced their online services, whereas the other 20 firms did not introduce their online services during the period under examination.

Findings

The research findings show that firm asset values increase following eChannel additions. Thus, eChannel additions enhance firm financial performance. A further analysis comparing the performance between firms with and without eChannel additions also shows that firms with eChannel additions have higher asset value growth rates, which further validates the capacity of eChannel additions to enhance financial performance.

Practical implications

Managers and shareholders in firms making eChannel additions are not required to be concerned regarding stock price volatility, and managers in firms without any eChannel investment could use eChannels to enhance their stock price and seize future opportunities. Using eChannel is a valid approach for firms to provide enhanced services to current customers, access new markets, and extend market coverage, thus enhancing overall financial performance. Investors could confide those firms implementing eChannel additions.

Originality/value

Studies investigating whether eChannel additions enhance firm financial performance are scant. No study has evaluated performance from a long-term perspective or from a volatility aspect (both are important considerations in eChannel performance evaluation). The research represents a pioneering work that empirically investigates these issues.

Keywords

Citation

Lee, Y., Shui-Lien Chen, L., Fei Chen, I. and Lin, B. (2014), "Incremental performance of an eChannel addition", Internet Research, Vol. 24 No. 1, pp. 46-62. https://doi.org/10.1108/IntR-11-2012-0227

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited

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