Impact of O2O platform multihoming and vertical integration on performance of local service firms – a quantile regression approach
ISSN: 1066-2243
Article publication date: 13 May 2020
Issue publication date: 26 August 2020
Abstract
Purpose
This study takes the cinema industry as the research context and investigates the impact of online to offline (O2O) platforms on cinemas' performance. Specifically, the purposes of this paper are threefold: first, to study the influence of platform multihoming on cinemas' performance; second, to examine the interaction impact of platform multihoming and vertical integration; third, to investigate how the influence of platform multihoming varies with cinemas' performance.
Design/methodology/approach
This study collects data from 1918 cinemas in China, employs quantile regressions to estimate the model and test the proposed hypotheses and adopts an instrumental variable method to examine the robustness of our results.
Findings
The findings confirm the positive role of platform multihoming for cinemas' performance. However, when a cinema has low-degree platform multihoming, the cinema's vertical integration is positively associated with its performance; when a cinema has high-degree platform multihoming, the cinema's vertical integration is negatively associated with its performance. Furthermore, results from quantile regressions indicate that low-performance cinemas benefit more than high-performance cinemas from employing platform multihoming strategy.
Research limitations/implications
This paper extends previous research by investigating the impact of platform multihoming on heterogeneous firms and the impact of interaction between platform multihoming and vertical integration. The findings imply that the impact of platform multihoming on firms' performance depends on firms' performance attributes and their vertical relationships.
Practical implications
Platform multihoming can be a double-edged sword for local service firms. When multihoming platforms, a local service firm should think about the fit between platforms and its own attributes, and identify the potential conflict between platform relationships and traditional relationships of industrial organization.
Originality/value
There is a growing interest in understanding platforms' role in the digital economy. The impact of platform participation on local service firms' performance is not sufficiently investigated. Previous research rarely addressed the impact by incorporating local service firms' performance attributes and the existing relationships of industrial organization.
Keywords
Acknowledgements
The authors appreciate all the helpful and insightful comments by anonymous reviewers. The authors owe their thanks to the financial support provided by the National Social Science Foundation of China (Grant No. 17BGL200), and the National Science Foundation of China (Grant No. 71971101).
Citation
Wan, X., Wang, N. and Liu, B.S.-C. (2020), "Impact of O2O platform multihoming and vertical integration on performance of local service firms – a quantile regression approach", Internet Research, Vol. 30 No. 5, pp. 1583-1610. https://doi.org/10.1108/INTR-03-2019-0087
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited