Effects of network externalities on user loyalty to online B2B platforms: an empirical study
Journal of Enterprise Information Management
ISSN: 1741-0398
Article publication date: 13 November 2019
Issue publication date: 20 February 2020
Abstract
Purpose
Given a product or service, the number of its installed user base has a significant positive effect on the existing users’ loyalty and new users’ conversion. This effect is conceptualized as network externalities in economics. Network externalities are supposed to be particularly striking in nowadays online business-to-business (B2B) platforms, but yet the mystery behind their effects on user loyalty to online B2B platforms remains to be delicately unraveled. The purpose of this paper is to discover the factors driving users’ loyalty, especially buyers’ loyalty, to online B2B platforms, by highlighting the impacts of network externalities on loyalty and other mediating factors.
Design/methodology/approach
A conceptual model of buyer loyalty under network externalities is elaborated. The reliability and validity of the instruments of the latent model constructs are assessed by confirmatory factor analysis, and the hypothesized causal relationships among the constructs are tested by structural equation modeling, on 710 valid buyer samples collected from a famous online B2B platform in China.
Findings
The analysis demonstrates that: perceived value, user satisfaction and switching costs are the major predictors of buyer loyalty to online B2B platforms characterized by network externalities; network externalities positively account for buyer loyalty by contributing to perceived value, user satisfaction and switching costs; and direct network externality (measured by perceived network size and perceived external prestige) has a significant effect on indirect network externality (measured by perceived compatibility and perceived complementarity).
Originality/value
The findings allow the authors to conclude meaningful managerial implications for online B2B service providers to build up loyal user bases through improving users’ perceptions of network externalities, switching costs and value.
Keywords
Acknowledgements
The authors contributed to this research equally. The authors would like to thank National Natural Science Foundation of China (Nos 71771122 and 71471089) for the financial support and Made-in-China.com for the financial, business and technical supports. The authors wish to express appreciation to Xiaoli Wu, Jie Zhao and Can Zhang for their helps with the data collecting and processing.
Citation
Cen, Y. and Li, L. (2020), "Effects of network externalities on user loyalty to online B2B platforms: an empirical study", Journal of Enterprise Information Management, Vol. 33 No. 2, pp. 309-334. https://doi.org/10.1108/JEIM-02-2019-0050
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited