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The web mirrors value in the real world: comparing a firm’s valuation with its web network position

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Abstract

This paper compares a firm’s innovation and performance with its online Web presence measured through the Web network structure. 489 firms in five different industries listed on the United States and Chinese stock markets are investigated. Using Web link data collected from Bing, blogs, Twitter and Wikipedia, we find positive correlation between betweenness centrality of a firm in the Web network and its innovation capability; and between betweenness centrality and financial performance. In order to get more accurate forecasting results, regression analysis is done for each industry and the combined industries in the United States and China. We also find that Twitter and Wikipedia only predict a firm’s performance in the United States, which is not surprising as they are officially blocked in China. Blogs predict better in China than they do in the United States, as it might still be a major social media tool for Chinese firms; while for the US firms, blogs have been supplemented by Twitter and Wikipedia.

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Notes

  1. https://Snaf.me.

  2. http://www.apple.com/itunes/ping/ (in the meantime discontinued).

  3. http://www.microsoft.com/en-us/news/Press/2012/Jun12/06-25MSYammerPR.aspx.

  4. http://www.sdn.sap.com/irj/scn/sapteched.

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Acknowledgments

This research has been supported by National Natural Science Foundation of China Project No.71272144, Social Science and Humanity on Young Foundation of the Ministry of Education of China Project No.10YJC870044, and Soft science research project of Guangdong province No. 2013B070206046.

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Authors and Affiliations

  1. International Business College, South China Normal University, Foshan, Guangdong, People’s Republic China

    Qiaoyun Yun

  2. MIT Center for Collective Intelligence, Cambridge, MA, USA

    Qiaoyun Yun & Peter A. Gloor

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  1. Qiaoyun Yun
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Correspondence to Peter A. Gloor.

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Yun, Q., Gloor, P.A. The web mirrors value in the real world: comparing a firm’s valuation with its web network position. Comput Math Organ Theory 21, 356–379 (2015). https://doi.org/10.1007/s10588-015-9189-6

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