Technology and Real Estate Brokerage Firm Financial Performance

Abstract

This study investigates the impact of Internet usage on the financial performance of residential real estate brokerage firms using a database of over 1,700 observations. Factor loadings and a factor score for Internet usage are developed. The results show that Internet use is positively related to revenue and net income, and negatively related to net margin. In a second stage analysis, Internet use is found to be positively associated with franchise affiliation, affiliation with a referral/relocation network and firm size, while negatively related to firm age, single-office firms and location in the West and South (relative to the Northeast).

Keywords: Internet, financial performance, brokerage, technology, residential

JEL Classification: L85, C45, L10, L11, O30, O31, O32, O33