Value Creation Tradeoff in Business Ecosystems: Leveraging Complementarities While Managing Interdependencies

2023 | Organization Science | Citations: 0

Authors: Agarwal, Shiva; Kapoor, Rahul

Abstract: Complementary assets play an important role in shaping an innovation’s commercia ... Expand

Abstract: Complementary assets play an important role in shaping an innovation’s commercialization success. In this paper, we broaden the locus of complementarities to examine the role of complementary technologies residing in the business ecosystems that are becoming an important source of value creation for innovating firms. We argue that, on one hand, complementary technologies help innovations create more value for their users. On the other hand, they can also limit the focal innovation’s value creation by exposing them to performance bottlenecks as the underlying technological architecture of the ecosystem evolves. We further extend the notion of specialization of complementary assets to ecosystems by considering complementary technologies that are specialized to a focal ecosystem and those that are available across multiple ecosystems. We highlight that, although the complementary technologies that are specialized to an ecosystem facilitate greater value creation, they are more likely to subject the focal innovation to performance bottlenecks. Evidence from 244,034 apps launched by software developers for Apple’s iPhone ecosystem during 2008–2015 offers strong support for our framework. In summary, the study sheds light on the value creation tradeoff for firms innovating in business ecosystems—the opportunities associated with leveraging complementarities and the challenges associated with managing technological interdependencies. Funding: S. Agarwal was funded by the McCombs School of Business at The University of Texas at Austin [Research Excellence Grant]. Collapse

Topics: mobile application innovation management value creation Apple iPhone iOS

Methods: statistical hypothesis test instrumental variables estimation cross sectional research proportional hazards model robustness check

P2P lending and Natural Disasters: Is Altruistic Behavior conditional?

2023 | International Conference on Information Systems | Citations: 0

Authors: Agrawal, Lavlin; Sharman, Raj; Tiu, Christian; Joenväärä, Juha

Abstract: In the aftermath of natural disasters, borrowers seeking credit from traditiona ... Expand

Abstract: In the aftermath of natural disasters, borrowers seeking credit from traditional sources, such as banks, may encounter higher interest rates than in pre-disaster periods. We examine the lending behavior of peer-topeer (P2P) platforms in the wake of disasters. Since P2P platforms involve individual investors in making lending decisions, they accommodate both profit motives and empathetic responses. Empirical evidence from psychology suggests that empathy can lead to prosocial behavior. Consistent with this assertion, we find that loans affected by natural disasters have lower interest rates than comparable loans not issued in the wake of disasters. Our study finds that lenders are involved in a prosocial behavior and are ready to give away some part of their interest income to help the communities in need. Collapse

Topics: crowdsourcing natural hazard peer-to-peer lending peer-to-peer model LendingClub

Methods: instrumental variables estimation experimental group sensitivity analysis ordinary least square robustness check

Get a Word in Edgewise: Post Character Limit and Social Media-Based Customer Service

2023 | HICSS | Citations: 0

Authors: Al Balawi, Ramah; Hu, Yuheng; Qiu, Liangfei

Abstract: In this paper, we study the role of extending character limits on firm responses ... Expand

Abstract: In this paper, we study the role of extending character limits on firm responses on social media. By leveraging a natural experiment setting: the unexpected increase in post character limit on Twitter, we empirically investigate the impact on the linguistic styles of social media-based customer service responses. Using a Regression Discontinuity in Time Design and leveraging a panel dataset, our results suggest that extending character limits influences firm to change the linguistic styles in their responses which could influence consumers' perceptions. Our results show that extending post-character limits significantly reduces the readability ease of firm responses, on average, while increasing the concreteness and personal closeness scores of these responses, on average. We show that these changes were effective in influencing customer satisfaction. Collapse

Topics: social media Twitter customer service customer satisfaction user experience

Methods: instrumental variables estimation regression discontinuity design descriptive statistic regression analysis method robustness check

Theories: theory of affordance

Public Opinion and Impression Management in the Communication of Performance During the Second Iraq War

2023 | Organization Science | Citations: 0

Authors: Audia, Pino G.; Rousseau, Horacio E.; Stimmler, Mary Kate

Abstract: Although studies show that organizations engaged in controversial actions often ... Expand

Abstract: Although studies show that organizations engaged in controversial actions often aim to minimize the release of threatening information, scholars know relatively little about what may prompt organizations to increase transparency in these situations. In this study, we focus on support from public opinion as a condition that may influence the disclosure of sensitive performance information to the public. Using the second Iraq War as an empirical context, we focus on the extent to which public officials—Pentagon spokespersons—release and frame information about war performance. This outcome is critical because the way in which organizations communicate their performance to outsiders has often been regarded as a key defensive impression management tactic. We hypothesize that high public support for the war will increase the likelihood that Pentagon officials release information about sensitive combat performance indicators in their press briefings and identify contingencies, such as adversity and organizational spokespersons’ power, that moderate this relationship. We also explore whether high public support decreases the strategic use of alternate performance frames that emphasize metrics that signal progress toward a desirable end state. Using a unique data set based on the coding of press briefings, public opinion data, and other public sources, we find support for several of our hypotheses. We discuss implications for understanding the relationship between public opinion and impression management and highlight the importance of extending this research to nongovernmental organizations. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.1598. Collapse

Topics: armed conflict organization structure website database system terrorist incident

Methods: logistic regression descriptive statistic statistical hypothesis test regression analysis method theory development

Theories: accountability theory

Attention to Digital Innovation: Exploring the Impact of a Chief Information Officer in the Top Management Team

2023 | Management Information Systems Quarterly | Citations: 0

Authors: Bendig, David; Wagner, Robin; Piening, Erk; Foege, Johann

Abstract: We draw on the attention-based view of the firm to examine whether and when the ... Expand

Abstract: We draw on the attention-based view of the firm to examine whether and when the presence of a CIO in the TMT has a positive effect on both firms' ideated digital innovation (IDI) (i.e., the intensity of firms' digital patenting activity) and commercialized digital innovation (CDI) (i.e., the digital sophistication of firms' new products). Building on the idea that attention processes are context dependent, we also explore the moderating roles of CEO characteristics (IT background and role tenure) as well as environmental characteristics (the industry's IT attention). We analyze data from a cross-industry panel of U.S. S&P 500 firms over eight years that includes up to 2,852 firm-year observations. The results indicate that CIO presence in the TMT is positively related to a firm's IDI and CDI. Furthermore, they show that the organizational context related to CEO characteristics moderates the CIO-CDI relationship and that the environmental context related to the industry's IT attention moderates the CIO-IDI relationship. Our research contributes to the information systems literature by providing robust evidence that CIO presence in the TMT positively influences a firm's digital innovation outcomes, showing how internal and external boundary conditions affect the work of CIOs, and elaborating the role of managerial attention as an underlying mechanism explaining digital innovation. Collapse

Topics: Chief Information Officer innovation management digital innovation research and development IT investment

Methods: regression analysis method theory development instrumental variables estimation Compustat descriptive statistic

How to react to a shock? Effects of Airbnb hosts’ choices and market segmentation at the time of Covid-19

2023 | Information & Management | Citations: 0

Authors: Buzzacchi, Luigi; Milone, Francesco Luigi; Paolucci, Emilio; Raguseo, Elisabetta

Abstract: We investigate the way service providers who operate on an online peer-to-peer ( ... Expand

Abstract: We investigate the way service providers who operate on an online peer-to-peer (P2P) platform readapted their marketing choices to face the Covid-19 pandemic. Through an empirical investigation on a large dataset of Airbnb properties in Rome, observed from January 2018 to December 2020, we provide a threefold contribution by investigating how Airbnb hosts reacted to the Covid-19 pandemic shock, in terms of marketing choices, such as price adjustments and flexible cancellation policies; the direct effects of these choices on their economic returns; and how service providers on Airbnb reacted to address the new needs of their customers during the Covid-19 pandemic. The findings provide useful insights for researchers and practitioners and show that the adoption of combined marketing choices led to more than proportional effects on performances as it allowed Airbnb hosts to exploit profitable market segmentation mechanisms. Collapse

Topics: pandemic Airbnb marketing management price management peer-to-peer model

Methods: econometric modeling descriptive statistic instrumental variables estimation robustness check longitudinal research

Token Incentives in a Volatile Crypto Market: The Effects of Token Price Volatility on User Contribution

2023 | Journal of Management Information Systems | Citations: 0

Authors: Chen, Kun; Fan, Yifan; Liao, Shaoyi Stephen

Abstract: Crypto tokens, issued and managed via smart contracts, function as rewards in bl ... Expand

Abstract: Crypto tokens, issued and managed via smart contracts, function as rewards in blockchain systems to encourage user participation. Distinct from monetary incentives, token incentives are uncertain in reward magnitude due to the large swings in token prices on crypto markets. By focusing on token price volatility, this study investigates how the reward uncertainty affects user contribution in a tokenized digital platform. Our empirical setting is Steemit, a platform where bloggers write posts and share token rewards based on their posts' popularity. We find that while high token price volatility induces a large volume of blog posts, it diminishes post quality. The dichotomous effects are explained via two mechanisms: users' direct reactions to reward uncertainties and their indirect reactions, mediated by altered token preference amid volatility shocks. Deeply exploring this dynamic process, our results reveal that token price volatility facilitates a platform's network short-term effect but impairs long-term user creativity. Our empirical findings thus extend the literature on blockchain economics and cryptocurrencies and have practical implications for the design of incentive mechanisms on tokenized digital platforms. Collapse

Topics: blog blockchain digital platform cryptocurrency user behavior

Methods: longitudinal research instrumental variables estimation data transformation principal component analysis vector autoregression

Theories: motivation crowding theory

The Cost of Free: The Effects of “Wait-for-Free” Pricing Schemes on the Monetization of Serialized Digital Content

2023 | Management Information Systems Quarterly | Citations: 0

Authors: Choi, Angela; Rhee, Ki-Eun; Yoon, Chamna; Oh, Wonseok

Abstract: Leveraging a combination of analytical frameworks and empirical assessments, th ... Expand

Abstract: Leveraging a combination of analytical frameworks and empirical assessments, this study investigates the effects of wait-for-free (WFF) pricing schemes on the monetization of serialized, digital entertainment content, which has become increasingly pervasive on online platforms. WFF pricing is a strategy in which consumers are given the option to either wait a certain amount of time to acquire digital content at no cost or pay to consume it immediately. We evaluate the extent to which habit formation and presentbiased preferences driven by the consumption of addictive stock affect individual consumers' willingness to wait (or pay) for content, which, in turn, determines the efficacy of WFF pricing. We also examine the conditions under which consumers switch from waiting for free content to instantaneously purchasing content. Our findings indicate that WFF pricing increases the sales of serialized digital content, generating new demand from customers who would otherwise forgo participation in the market. In addition, the pricing design effectively generates sustained profits in the long run. We found that most consumers who initiate a purchase either upon initial market entry or upon switching continue to purchase as new episodes become available. Moreover, the results indicate that as a user accumulates free episodes of a specific series, given extended waiting periods, the likelihood of their conversion from a wait-for-free customer to an instant-purchase customer increases. In particular, WFF pricing effectively augments the willingness to pay of low-valuation consumers as habit formation builds up through time with the free consumption of serialized content. One free episode can elevate the likelihood of consumer purchase by up to 13%. However, as the number of free episodes consumed goes beyond a threshold, the likelihood of conversion decreases. We conclude with a discussion of managerial implications that can help content providers monetize their serialized digital content products. Collapse

Topics: price management consumer behavior advertising management digital good customer satisfaction

Methods: mathematical model robustness check econometric modeling proportional hazards model survival analysis

Theories: behavioral economics

The Downside of Displaying Agentic Values: Evidence from Shareholder Activism

2023 | Organization Science | Citations: 0

Authors: DesJardine, Mark R.; Shi, Wei

Abstract: Activist shareholders face a challenging task in preemptively identifying execut ... Expand

Abstract: Activist shareholders face a challenging task in preemptively identifying executives who they perceive might destroy shareholder value—before harm is done. We develop a framework where activist shareholders resolve this problem by forming attributions about executives’ intentions based on their displays of agentic values, which reflect independence and control. For activist shareholders, a strong display of independence can evoke concerns that an executive will act without the regulation of shareholder input, and a strong display of control can create concerns an executive will engineer governance provisions to their own benefit. As such, we hypothesize that above-average agentic value displays by CEOs increase the likelihood firms are targeted by shareholder activists. Extending our theory, we argue the positive effect that agentic value displays have on attracting shareholder activism is stronger when CEOs permit higher spending on corporate and stakeholder investment, both of which can exacerbate shareholder harm when executed poorly. We also posit that activism campaigns driven by CEOs’ agentic value displays will largely come from activist shareholders seeking to exert their own control over agentic-speaking CEOs. Using data on shareholder activism campaigns at US-based companies from 2003–2018, we find support for our hypotheses. We discuss multiple theoretical implications for research on corporate governance, stakeholder management, and investor relations. Collapse

Topics: corporate governance research and development accounting database system Netflix

Methods: descriptive statistic theory development instrumental variables estimation robustness check statistical hypothesis test

Theories: big five model attribution theory behavioral economics

Variations in the Corporate Social Responsibility-Performance Relationship in Emerging Market Firms

2023 | Organization Science | Citations: 0

Authors: Cuervo-Cazurra, Alvaro; Purkayastha, Saptarshi; Ramaswamy, Kannan

Abstract: Corporate social responsibility (CSR) and its impact on performance have generat ... Expand

Abstract: Corporate social responsibility (CSR) and its impact on performance have generated a debate that has evolved across several perspectives (shareholder, stakeholder, resource-based, and contingency). Building on the resource-based and contingency perspectives, we shed new light on this debate by analyzing the impact of CSR on performance in emerging market firms, advancing the idea that CSR is a mechanism that helps address market and government failures. We first argue that CSR’s three constituent dimensions (environmental, social, and governance) vary in their impact on performance because each dimension has a different mitigating effect on contextual failures that hobble emerging market firms. Specifically, we contend that social CSR has a larger effect on performance than either governance CSR or environmental CSR for emerging market firms, because the former helps build capabilities that more directly reduce the negative consequences of government failures in the provision of public goods and services that firms need to operate efficiently. We then provide additional depth to this idea by arguing that other mechanisms used for mitigating market failures in an emerging market context, namely firm-level business group affiliation and country-level government policy nudges, strengthen this differential influence of each of the three dimensions of CSR on performance. Analyses of a sample of 89 publicly traded Indian firms from 2007 to 2017 support these arguments. Funding: A. Cuervo-Cazurra thanks the Lloyd Mullin fellowship at Northeastern University for financial support. S. Purkayastha thanks Indian Institute of Management, Calcutta for financial support. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.1639. Collapse

Topics: organizational productivity database system public good legal context societal evaluation criteria

Methods: experimental group longitudinal research robustness check instrumental variables estimation difference in differences

Theories: resource based view of the firm