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Implications of Application Programming Interfaces for Third‐Party New App Development and Copycatting

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  • Ling Xue
  • Peijian Song
  • Arun Rai
  • Cheng Zhang
  • Xia Zhao

Abstract

Digital platforms can use application programming interfaces (APIs) to support third‐party development of new apps and achieve growth at an unprecedented scale. However, there is also a dilemma between original new development and copycatting by third‐party suppliers. Motivated by this tension, we examined how APIs provided by digital platforms may influence two types of third‐party new app development: original apps and app copycatting. We also investigated how these influences are dependent on app market conditions. We empirically tested our theoretical conjectures using data on a leading web browser platform, and applying analytics techniques on app source code to identify original apps and copycat apps. Based on a difference‐in‐differences identification strategy, our findings suggest that the provision of platform APIs enhance the original new development of apps. While platform APIs may facilitate app copycatting as well, our findings suggest that platform APIs can enhance app suppliers’ relative attractiveness to original new development in comparison to copycatting. The enhancing effect of platform APIs on original new development is strengthened by app market potential and high market‐level app complexity. The enhancing effect of platform APIs on app copycatting is strengthened by app market potential and high market concentration. Our study has important theoretical and practical implications.

Suggested Citation

  • Ling Xue & Peijian Song & Arun Rai & Cheng Zhang & Xia Zhao, 2019. "Implications of Application Programming Interfaces for Third‐Party New App Development and Copycatting," Production and Operations Management, Production and Operations Management Society, vol. 28(8), pages 1887-1902, August.
    • Handle: RePEc:bla:popmgt:v:28:y:2019:i:8:p:1887-1902
    DOI: 10.1111/poms.13021
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    Cited by:

    1. Cenamor, Javier, 2021. "Complementor competitive advantage: A framework for strategic decisions," Journal of Business Research, Elsevier, vol. 122(C), pages 335-343.
    2. Song, Zhuzhu & Qin, Zhongfeng & Liu, Tian-Liang, 2024. "Implications of counterfeiting and differentiation on online knowledge services with suitability upgrades," Journal of Retailing and Consumer Services, Elsevier, vol. 78(C).
    3. Zhu, Zujun & Huang, Qian & Liu, Hefu, 2023. "How heuristic cues impact crowdfunding performance: The moderating role of platform competition intensity and platform demand potential," Journal of Business Research, Elsevier, vol. 160(C).
    4. Haoyu Liu & Shulin Liu, 2020. "Research on Advertising and Quality of Paid Apps, Considering the Effects of Reference Price and Goodwill," Mathematics, MDPI, vol. 8(5), pages 1-23, May.
    5. Sunil Mithas & Yanzhen Chen & Yatang Lin & Alysson De Oliveira Silveira, 2022. "On the causality and plausibility of treatment effects in operations management research," Production and Operations Management, Production and Operations Management Society, vol. 31(12), pages 4558-4571, December.
    6. Jens Foerderer & Nele Lueker & Armin Heinzl, 2021. "And the Winner Is …? The Desirable and Undesirable Effects of Platform Awards," Information Systems Research, INFORMS, vol. 32(4), pages 1155-1172, December.

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