Web traffic and firm performance: Evidence from the MENA region

Omar Farooq, Samir Aguenaou

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Does the traffic generated by websites of firms signal anything to stock market participants? Does higher web-traffic translate into availability of more information and therefore lower agency problems? And if answers to above questions are in affirmative, does higher web-traffic traffic translate into better firm performance? This paper aims to answer these questions by documenting a positive relationship between the extent of web-traffic and firm performance in the MENA region during the 2010. We argue that higher web-traffic lowers the agency problems in firms by disseminating more information to stock market participants. Consequently, lower agency problems translate into better performance. Furthermore, we also show that agency reducing role of web-traffic is more pronounced in regimes where information environment is already bad. For example, our results show stronger impact of web-traffic on firm performance in civil law countries, firms with concentrated ownership, and firms with more intangible assets. All of these groups are characterized by higher agency problems. Our results, therefore, indicate that web-traffic can play a substitute for traditional governance mechanisms in the MENA region.
Original languageEnglish
JournalJournal of Applied Business Research
Volume29
Issue number5
Pages (from-to)1317-1323
ISSN0892-7626
Publication statusPublished - 2013

Fingerprint

Web traffic
Firm performance
Middle East and North Africa
Agency problems
Stock market
Substitute
Civil law
Governance mechanisms
Web sites
Information environment
Intangible assets
Concentrated ownership

Cite this

Farooq, Omar ; Aguenaou, Samir. / Web traffic and firm performance : Evidence from the MENA region. In: Journal of Applied Business Research. 2013 ; Vol. 29, No. 5. pp. 1317-1323.
@article{f1e9091744f942dbbe1f85ce5ac398ca,
title = "Web traffic and firm performance: Evidence from the MENA region",
abstract = "Does the traffic generated by websites of firms signal anything to stock market participants? Does higher web-traffic translate into availability of more information and therefore lower agency problems? And if answers to above questions are in affirmative, does higher web-traffic traffic translate into better firm performance? This paper aims to answer these questions by documenting a positive relationship between the extent of web-traffic and firm performance in the MENA region during the 2010. We argue that higher web-traffic lowers the agency problems in firms by disseminating more information to stock market participants. Consequently, lower agency problems translate into better performance. Furthermore, we also show that agency reducing role of web-traffic is more pronounced in regimes where information environment is already bad. For example, our results show stronger impact of web-traffic on firm performance in civil law countries, firms with concentrated ownership, and firms with more intangible assets. All of these groups are characterized by higher agency problems. Our results, therefore, indicate that web-traffic can play a substitute for traditional governance mechanisms in the MENA region.",
author = "Omar Farooq and Samir Aguenaou",
year = "2013",
language = "English",
volume = "29",
pages = "1317--1323",
journal = "Journal of Applied Business Research",
issn = "0892-7626",
publisher = "Clute Institute for Academic Research",
number = "5",

}

Web traffic and firm performance : Evidence from the MENA region. / Farooq, Omar; Aguenaou, Samir.

In: Journal of Applied Business Research, Vol. 29, No. 5, 2013, p. 1317-1323.

Research output: Contribution to journalJournal articleResearchpeer-review

TY - JOUR

T1 - Web traffic and firm performance

T2 - Evidence from the MENA region

AU - Farooq, Omar

AU - Aguenaou, Samir

PY - 2013

Y1 - 2013

N2 - Does the traffic generated by websites of firms signal anything to stock market participants? Does higher web-traffic translate into availability of more information and therefore lower agency problems? And if answers to above questions are in affirmative, does higher web-traffic traffic translate into better firm performance? This paper aims to answer these questions by documenting a positive relationship between the extent of web-traffic and firm performance in the MENA region during the 2010. We argue that higher web-traffic lowers the agency problems in firms by disseminating more information to stock market participants. Consequently, lower agency problems translate into better performance. Furthermore, we also show that agency reducing role of web-traffic is more pronounced in regimes where information environment is already bad. For example, our results show stronger impact of web-traffic on firm performance in civil law countries, firms with concentrated ownership, and firms with more intangible assets. All of these groups are characterized by higher agency problems. Our results, therefore, indicate that web-traffic can play a substitute for traditional governance mechanisms in the MENA region.

AB - Does the traffic generated by websites of firms signal anything to stock market participants? Does higher web-traffic translate into availability of more information and therefore lower agency problems? And if answers to above questions are in affirmative, does higher web-traffic traffic translate into better firm performance? This paper aims to answer these questions by documenting a positive relationship between the extent of web-traffic and firm performance in the MENA region during the 2010. We argue that higher web-traffic lowers the agency problems in firms by disseminating more information to stock market participants. Consequently, lower agency problems translate into better performance. Furthermore, we also show that agency reducing role of web-traffic is more pronounced in regimes where information environment is already bad. For example, our results show stronger impact of web-traffic on firm performance in civil law countries, firms with concentrated ownership, and firms with more intangible assets. All of these groups are characterized by higher agency problems. Our results, therefore, indicate that web-traffic can play a substitute for traditional governance mechanisms in the MENA region.

M3 - Journal article

VL - 29

SP - 1317

EP - 1323

JO - Journal of Applied Business Research

JF - Journal of Applied Business Research

SN - 0892-7626

IS - 5

ER -