IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v169y2023ics0148296323006161.html
   My bibliography  Save this article

Managing two-sided B2B electronic markets: Governance mechanisms, performance implications, and boundary conditions

Author

Listed:
  • Sen, Argha
  • Kumar, Alok
  • Dubey, Vivek
  • Gupta, Aditya

Abstract

Two-sided B2Belectronic markets involve a market-maker platform firm thatcoordinates transactions between the buyer and seller sides of the online marketplace.This paper examines certain formal (monitoring) and informal (procedural fairness) governance processes that platform firms can leverage to manage platform participants. We hypothesize the impact of these processes on sellers’ performance vis-a-vis the platform’s buyers. We also incorporate the platform firm’s structural attributes (self-participation and investments) as moderators of the relationship between platform governance and seller performance. We find that both monitoring and procedural fairness increase seller performance individually. However, the two moderators present opposite interaction patterns: self-participation promotes the performance properties of fairness, but undermines that of monitoring, while investments exhibit an exactly opposite effect. For platform managers, our findings suggest two “choice-packages” comprising different process-structure constellations for enhancing the performance of platform participants.

Suggested Citation

  • Sen, Argha & Kumar, Alok & Dubey, Vivek & Gupta, Aditya, 2023. "Managing two-sided B2B electronic markets: Governance mechanisms, performance implications, and boundary conditions," Journal of Business Research, Elsevier, vol. 169(C).
    • Handle: RePEc:eee:jbrese:v:169:y:2023:i:c:s0148296323006161
    DOI: 10.1016/j.jbusres.2023.114257
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296323006161
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2023.114257?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mathur, Pragya & Sarin Jain, Shalini, 2020. "Not all that glitters is golden: The impact of procedural fairness perceptions on firm evaluations and customer satisfaction with favorable outcomes," Journal of Business Research, Elsevier, vol. 117(C), pages 357-367.
    2. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    3. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, September.
    4. Zhou, Liying & Mao, Hongyi & Zhao, Taiyang & Wang, Valerie Lynette & Wang, Xiaodong & Zuo, Peng, 2022. "How B2B platform improves Buyers’ performance: Insights into platform’s substitution effect," Journal of Business Research, Elsevier, vol. 143(C), pages 72-80.
    5. Garen, John, 1984. "The Returns to Schooling: A Selectivity Bias Approach with a Continuous Choice Variable," Econometrica, Econometric Society, vol. 52(5), pages 1199-1218, September.
    6. Geoffrey G. Parker & Marshall W. Van Alstyne, 2005. "Two-Sided Network Effects: A Theory of Information Product Design," Management Science, INFORMS, vol. 51(10), pages 1494-1504, October.
    7. Hagiu, Andrei & Wright, Julian, 2015. "Multi-sided platforms," International Journal of Industrial Organization, Elsevier, vol. 43(C), pages 162-174.
    8. Yadong Luo, 2008. "Procedural fairness and interfirm cooperation in strategic alliances," Strategic Management Journal, Wiley Blackwell, vol. 29(1), pages 27-46, January.
    9. Zott, Christoph & Amit, Raphael & Donlevy, Jon, 2000. "Strategies for value creation in e-commerce:: best practice in Europe," European Management Journal, Elsevier, vol. 18(5), pages 463-475, October.
    10. Birger Wernerfelt, 1984. "A resource‐based view of the firm," Strategic Management Journal, Wiley Blackwell, vol. 5(2), pages 171-180, April.
    11. David Lucking-Reiley & Daniel F. Spulber, 2001. "Business-to-Business Electronic Commerce," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 55-68, Winter.
    12. Chris Forman & Anindya Ghose & Batia Wiesenfeld, 2008. "Examining the Relationship Between Reviews and Sales: The Role of Reviewer Identity Disclosure in Electronic Markets," Information Systems Research, INFORMS, vol. 19(3), pages 291-313, September.
    13. Papadas, Karolos-Konstantinos & Avlonitis, George J. & Carrigan, Marylyn & Piha, Lamprini, 2019. "The interplay of strategic and internal green marketing orientation on competitive advantage," Journal of Business Research, Elsevier, vol. 104(C), pages 632-643.
    14. Fuller, Christie M. & Simmering, Marcia J. & Atinc, Guclu & Atinc, Yasemin & Babin, Barry J., 2016. "Common methods variance detection in business research," Journal of Business Research, Elsevier, vol. 69(8), pages 3192-3198.
    15. Kathleen M. Eisenhardt, 1985. "Control: Organizational and Economic Approaches," Management Science, INFORMS, vol. 31(2), pages 134-149, February.
    16. Edward G. Anderson & Geoffrey G. Parker & Burcu Tan, 2014. "Platform Performance Investment in the Presence of Network Externalities," Information Systems Research, INFORMS, vol. 25(1), pages 152-172, March.
    17. Poddar, Amit & Donthu, Naveen & Wei, Yujie, 2009. "Web site customer orientations, Web site quality, and purchase intentions: The role of Web site personality," Journal of Business Research, Elsevier, vol. 62(4), pages 441-450, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christian Stummer & Dennis Kundisch & Reinhold Decker, 2018. "Platform Launch Strategies," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 60(2), pages 167-173, April.
    2. Grace Gu & Feng Zhu, 2018. "Trust and Disintermediation: Evidence from an Online Freelance Marketplace," Harvard Business School Working Papers 18-103, Harvard Business School.
    3. Xing Wan & Javier Cenamor & Geoffrey Parker & Marshall Van Alstyne, 2017. "Unraveling Platform Strategies: A Review from an Organizational Ambidexterity Perspective," Sustainability, MDPI, vol. 9(5), pages 1-18, May.
    4. Hakan Ozalp & Carmelo Cennamo & Annabelle Gawer, 2018. "Disruption in Platform‐Based Ecosystems," Journal of Management Studies, Wiley Blackwell, vol. 55(7), pages 1203-1241, November.
    5. Carmelo Cennamo & Hakan Ozalp & Tobias Kretschmer, 2018. "Platform Architecture and Quality Trade-offs of Multihoming Complements," Information Systems Research, INFORMS, vol. 29(2), pages 461-478, June.
    6. Suuronen, Sami & Ukko, Juhani & Saunila, Minna & Rantala, Tero & Rantanen, Hannu, 2024. "The implications of multi-sided platforms in managing digital business ecosystems," Journal of Business Research, Elsevier, vol. 175(C).
    7. Yifan Dou & D. J. Wu, 2021. "Platform Competition Under Network Effects: Piggybacking and Optimal Subsidization," Information Systems Research, INFORMS, vol. 32(3), pages 820-835, September.
    8. Tang, Hua & Chen, Jing & Ai, Xingzheng & Li, Xiaojing & He, Haojia, 2023. "First-party content decision under competitive hardware/software platforms: Free vs. charge," European Journal of Operational Research, Elsevier, vol. 311(3), pages 1068-1083.
    9. Lei Huang & Yandong Zhao & Liang Mei & Peiyi Wu & Zhihua Zhao & Yijun Mao, 2019. "Structural Holes in the Multi-Sided Market: A Market Allocation Structure Analysis of China’s Car-Hailing Platform in the Context of Open Innovation," Sustainability, MDPI, vol. 11(20), pages 1-20, October.
    10. Mattila, Juri & Seppälä, Timo & Holmström, Jan, 2016. "Product-centric Information Management: A Case Study of a Shared Platform with Blockchain Technology," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series qt65s5s4b2, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley.
    11. Krämer, Jan & Wohlfarth, Michael, 2018. "Market power, regulatory convergence, and the role of data in digital markets," Telecommunications Policy, Elsevier, vol. 42(2), pages 154-171.
    12. Huotari, Pontus & Ritala, Paavo, 2021. "When to switch between subscription-based and ad-sponsored business models: Strategic implications of decreasing content novelty," Journal of Business Research, Elsevier, vol. 129(C), pages 14-28.
    13. Bertschek, Irene & Briglauer, Wolfgang & Hüschelrath, Kai & Krämer, Jan & Frübing, Stefan & Kesler, Reinhold & Saam, Marianne, 2016. "Metastudie zum Fachdialog Ordnungsrahmen für die Digitale Wirtschaft: Im Auftrag des Bundesministeriums für Wirtschaft und Energie (BMWi)," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 147040, June.
    14. Xie, Jiaping & Zhu, Weijun & Wei, Lihong & Liang, Ling, 2021. "Platform competition with partial multi-homing: When both same-side and cross-side network effects exist," International Journal of Production Economics, Elsevier, vol. 233(C).
    15. Peters, Frank, 2018. "The business of video games is a multi-player game : Essays on governance choices and performance in a two-sided market in the cultural industries," Other publications TiSEM 886b3148-4bbb-4ea4-b666-0, Tilburg University, School of Economics and Management.
    16. Dohoon Kim, 2018. "Equilibrium Analysis for Platform Developers in Two-Sided Market with Backward Compatibility," Games, MDPI, vol. 9(4), pages 1-24, October.
    17. Pundziene, Asta & Gerulaitiene, Neringa & Bez, Sea Matilda & Georgescu, Irène & Mathieu, Christopher & Carrabina-Bordoll, Jordi & Rialp-Criado, Josep & Nieminen, Hannu & Varri, Alpo & Boethius, Susann, 2023. "Value capture and embeddedness in social-purpose-driven ecosystems. A multiple-case study of European digital healthcare platforms," Technovation, Elsevier, vol. 124(C).
    18. Soichiro Takagi, 2020. "Literature survey on the economic impact of digital platforms," International Journal of Economic Policy Studies, Springer, vol. 14(2), pages 449-464, August.
    19. Chatterjee, Sheshadri & Chaudhuri, Ranjan & Mariani, Marcello & Fosso Wamba, Samuel, 2023. "Examining the role of intellectual capital on knowledge sharing in digital platform-based MNEs and its impact on firm performance," Technological Forecasting and Social Change, Elsevier, vol. 197(C).
    20. Carmelo Cennamo & Juan Santaló, 2019. "Generativity Tension and Value Creation in Platform Ecosystems," Organization Science, INFORMS, vol. 30(3), pages 617-641, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:169:y:2023:i:c:s0148296323006161. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.