A Thousand Faces: Sellers’ Heterogeneous Responses to Platform Change and the Importance of Offline Environments (job market paper). With Chuck Eesley.
How do sellers respond to a platform’s design changes and how do their responses affect platform success? Prior studies show that platforms orchestrate seller behavior through changing design features. In this study, we explore how sellers respond to a platform’s design changes and how their responses affect platform outcomes. Using data from a leading e-commerce platform, we find that an ambiguous design change failed because many sellers adopted strategies that were misaligned with its design goals. Interestingly, relative to urban sellers, rural sellers were more likely to misinterpret the design change, and this effect can be explained by disparities in the richness of sellers’ offline information channels. Overall, this study demonstrates that sellers’ heterogeneous local environments influence their online strategies and, consequently, the platform’s effectiveness. Our findings offer important implications for platform design and entrepreneurship in digital markets.
Photo source: CEOCIO.
Photo source: CEOCIO.
Rural E-Commerce Enhanced by Return Talent: Evidence from Alibaba. With Chuck Eesley.
The Internet can elevate the rural economy by connecting rural businesses to the urban market, but we have yet to witness much evidence of successful online entrepreneurship in rural areas. In this study, we show that return migration is a crucial factor for not only the adoption, but also the performance of e-commerce in rural areas. We set up a natural experiment involving a policy change in Jiangsu province that made it easier for rural migrants to return to and work in their hometowns. Using a difference-in-differences design, We find that after the policy change, rural e-commerce sellers in the province that implemented the policy change significantly outperformed sellers in a neighboring province with lower mobility for rural migrants. This study suggests that the successful adoption and usage of a modern technology in marginalized areas depends on not only the technology itself, but also the offline trends that make available an adequate talent pool.
Navigating the Winds (and Walls) of Change: A Theoretical Framework for Firm Strategy in the Midst of Reform. With Daniel Armanios and Chuck Eesley.
How can firms strategically maneuver the complex political and institutional landscape during a market reform? One perspective, rooted in the non-market strategy literature, emphasizes resource acquisition and capability building to shape government policy and resist change. Another perspective, rooted in institutional theory, point to the dominant role of governments and movement organizations in conditioning what opportunities firms face. Our model integrates and adds nuance to both perspectives by arguing that firm performance in the midst of reform depends on the type of firm, the types of reform, and the type of stakeholders affecting reform implementation. With that, we propose a series of strategies firms can adopt in a given situation.