Big Data and Firm Risk

This paper investigates the impact of firm data collection and analysis of collected data on the riskiness of firm cash flows. I use a scraped data set of the third party resources loaded on firms’ websites as a measure of firm data collection and analysis practices. I find that firm use of less effective web analytics is associated with an increase in the variance of sales, inventory, and both fixed and variable costs. This effect is despite a lack of change in the level of these variables. Looking at the effect of treatment on the treated, there is higher profit and sales variance during times of higher uncertainty. I use differences in web analytics technology and a change in their relative effectiveness as my identification strategy. As a case study of a large negative demand shock, I look at differences in firm reactions to COVID-19 based on their web analytics usage.

Name thesis:degree_name

Master

Department dc:contributor.department

Sloan School of Management

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2022

Author dc:creator

• Paine, Fiona

Advisor dc:contributor.advisor

• Palmer, Christopher

Statement dc:rights

• In Copyright - Educational Use Permitted
• Copyright MIT

Licence dc:rights.uri

• http://rightsstatements.org/page/InC-EDU/1.0/

Handle dc:identifier.uri

https://hdl.handle.net/1721.1/145178

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/145178