A RISK SCORING MODEL AND APPLICATION TO MEASURING INTERNET STOCK PERFORMANCE

Chien-Ta Bruce Ho (), Desheng Dash Wu () and David L. Olson ()
Additional contact information
Chien-Ta Bruce Ho: Institute of Electronic Commerce, National Chung Hsing University, Taiwan
Desheng Dash Wu: Reykjavik University, Iceland;
David L. Olson: Department of Management, University of Nebraska, USA

International Journal of Information Technology & Decision Making (IJITDM), 2009, vol. 08, issue 01, 133-149

Abstract: This paper proposes a risk scoring model to assess the performance of 27 US companies listed online by applying Data Envelopment Analysis (DEA) and comparing with the traditional financial measure Return on Equity (ROE). The DEA evaluation process involves two processes: (1) computation of operating efficiency and effectiveness to measure a company's operating performance, and (2) measurement of the return level per unit of risk to provide guidance for their investors. The risk scoring model is useful for both investors and company managers. For investors, it yields a new stock selecting strategy. For managers, it provides a risk-adjusted performance evaluation process. Empirical results show that for the Internet industry, the effectiveness of a company is more important than operating efficiency. Investors investing in efficient online companies yield higher returns.

Keywords: Performance evaluation; risk factors; online company; data envelopment analysis (DEA); Return on Equity (ROE) (search for similar items in EconPapers)
Date: 2009
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0219622009003302
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:ijitdm:v:08:y:2009:i:01:n:s0219622009003302

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0219622009003302

Access Statistics for this article

International Journal of Information Technology & Decision Making (IJITDM) is currently edited by Yong Shi

More articles in International Journal of Information Technology & Decision Making (IJITDM) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().