Theoretical foundations for the impact of digitalization of business on a company’s share price
Abstract
The global economy is undergoing a significant structural transformation. The redistribution of shares in the S&P 500 Index over the last 40 years shows significant growth in new sectors of the economy. The digital economy is driving the growth of new business and the transformation of old business. The rise in value of IT companies and the creation of digital ecosystems increases interest in this sector of the economy and creates new valuation challenges for cross-sector companies. By bringing new digital products to the core business, companies are being transformed into innovative holdings that require a valuation apparatus to correctly value their shares.
This paper examines the topical issues of incorporating digitalization of business into company shareholder value, analyses the structural changes in the global economy, and proposes ways of updating the valuation apparatus of company value. This paper considers the reasons for the sharp increase in the capitalization of IT companies, the preconditions for a new economic crisis, the theoretical and practical aspects of the digitalization of business, and estimates the size of the “digital premium” to the value of IT companies. Moreover, this paper covers a literature review on the impact of intellectual capital and R&D expenditures on business performance and valuation of company stock.
About the Author
E. I. Gibadullin
Financial University under the Government of the Russian Federation
Russian Federation
Russian Federation
Postgraduate
References
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Review
For citations:
Gibadullin E.I. Theoretical foundations for the impact of digitalization of business on a company’s share price. Kazan economic vestnik. 2021;(5):77-85. (In Russ.)
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