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Article
Publication date: 1 September 2004

Jørgen P. Bansler and Erling Havn

This paper seeks to analyze the role of network effects in relation to the adoption and use of systems for knowledge sharing in organizations and draws on recent…

Abstract

This paper seeks to analyze the role of network effects in relation to the adoption and use of systems for knowledge sharing in organizations and draws on recent developments within network economics to outline a theoretical perspective on the implementation of knowledge repositories in organizations. Findings from a longitudinal field study are presented to explore the concept of network effects in more detail. Commonly associated with economics, the concept of network effects can also be used in an organizational context to study adoption dynamics and use patterns when new information and communication technologies are introduced. The analysis of the field study data shows that knowledge repositories exhibit strong network effects, which can complicate the implementation process in multiple ways. The research is based on a single, in‐depth case study. Future research should study the role of network effects in relation to other technologies and organizational contexts. It underscores the need to be aware of – and try to manage – network effects when implementing knowledge repositories and other “networked” technologies. By and large, IS researchers have overlooked the role of network effects in relation to information and communication technologies in organizations. This paper begins to address this gap by focusing on the role of network effects in the adoption and use of knowledge repositories. It is suggested that the concept of network effects provides a useful theoretical lens in a number of other cases.

Details

Information Technology & People, vol. 17 no. 3
Type: Research Article
ISSN: 0959-3845

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Article
Publication date: 17 April 2009

Douglas J. Ayers, Nir Menachemi, Zo Ramamonjiarivelo, Michael Matthews and Robert G. Brooks

This paper aims to examine the role of network effects (defined as increased utility for users of a technology that occurs when adoption increases among other users) in…

Abstract

Purpose

This paper aims to examine the role of network effects (defined as increased utility for users of a technology that occurs when adoption increases among other users) in the adoption of electronic medical records (EMR) systems. EMR systems, which have experienced slow adoption rates, promise to improve the efficiency of the healthcare system by facilitating information exchange among physicians caring for the same patients.

Design/methodology/approach

Survey responses from physicians are used to test several hypotheses. The authors are interested in how market level EMR adoption was related to physician adoption intentions. The authors also test the “strong ties” notion of network effects by examining whether EMR adoption among generalists, and specialist physicians, had differing influences on adoption intentions in a given market.

Findings

Support for network effects is found; each one unit increase in market‐level EMR adoption is associated with a significant increase in overall physician adoption intention in that market. Secondary analyses suggest adoption of EMRs by specialists is significantly predictive of generalists' adoption intentions in a given market. However, as predicted, EMR among generalists does not influence other generalists' intentions; nor does EMR adoption by a specialists influence other specialists' intentions.

Research implications

Network effects play a role in the EMR adoption among physicians. Decision‐makers wanting to influence adoption should target defined market segments in an effort to build a critical mass of adoption then move to adjacent segments once network effects take hold.

Originality/value

This paper applies network effects theory to help explain the suboptimal adoption rates of an important healthcare technology.

Details

Journal of Product & Brand Management, vol. 18 no. 2
Type: Research Article
ISSN: 1061-0421

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Book part
Publication date: 1 October 2007

Johannes Moenius and Vitor Trindade

This chapter summarizes the interdependence of network effects, compatibility standards and intellectual property rights (IPR) in the global economy. This interdependence…

Abstract

This chapter summarizes the interdependence of network effects, compatibility standards and intellectual property rights (IPR) in the global economy. This interdependence is analyzed at the product market level and at the research and development level. The questions to be examined are: how IPR influence the provision of goods exhibiting network effects; the impact of network effects on the creation, dissemination and protection of intellectual property and of goods with strong intellectual property content; and strategic issues faced by firms and governments in goods that exhibit network effects. We answer these questions by studying how network effects influence the value of IPR and how in turn IPR may influence the size of networks. We highlight the central importance of IPR protection of interface standards for market outcomes, and how different types of IPR generate market power through interface standards. We review similarities of network effects in product markets and research networks as well as impediments to their expansion. We finally discuss alternative outcomes of standardization policies, institutional choices and strategic coordination efforts by firms. We emphasize how the answers to these questions are distinct in an international context.

Details

Intellectual Property, Growth and Trade
Type: Book
ISBN: 978-1-84950-539-0

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Article
Publication date: 28 September 2020

Yi Liu, Ting Liu, Yuan Li and Liyang Ruan

Previous studies have investigated the influence strategy–economic satisfaction links within a pairwise framework. This study aims to reexamine this issue in a network

Abstract

Purpose

Previous studies have investigated the influence strategy–economic satisfaction links within a pairwise framework. This study aims to reexamine this issue in a network context from both the structural and relational embeddedness perspectives.

Design/methodology/approach

An ego network approach in which the network consists of a focal distributor, other distributors and alternate manufacturers is adopted to measure the distributor’s network. Drawing on data from 124 distributors from China’s tire industry, a hierarchical multiple regression analysis is used to test the hypotheses.

Findings

The empirical results find a positive relationship between a manufacturer’s noncoercive influence strategies and the distributor’s economic satisfaction and an inverse U-shaped relationship between coercive influence strategies and economic satisfaction. It discusses the joint effects of coercive and noncoercive influence strategies and finds that the former mitigate the positive effects of the latter and that the latter flatten the inverse-U shaped effect of the former. Further, when a distributor spans rich structural holes, the effects of coercive and noncoercive influence strategies on economic satisfaction weaken. When a distributor has strong ties with its network members, the effects of noncoercive influence strategies are mitigated, while the effects of coercive influence strategies are enhanced.

Practical implications

This study provides implications for manufacturers, particularly concerning how to properly exert influence strategies to improve distributors’ economic satisfaction. Manufacturers should consider the attributes of the networks in which the distributors are embedded, involving structural holes and tie strength. They should also carefully use the two influence strategies simultaneously.

Originality/value

This study contributes to the influence strategy literature by incorporating a network perspective by empirically examining the different moderating effects of structural holes and tie strength; provides a new and powerful explanation for the effects that coercive influence strategies have on economic satisfaction by testing an inverse U-shaped effect; and examines the effects of the interaction of two strategies.

Details

Journal of Business & Industrial Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 4 May 2021

Yugang Yu, Xin Zhang, Xiong Zhang and Wei T. Yue

New information technologies such as IoT and big data analytics have reshaped the development of smart green products. These products exhibit two important features that…

Abstract

Purpose

New information technologies such as IoT and big data analytics have reshaped the development of smart green products. These products exhibit two important features that are not seen in traditional products: environmental friendliness and data network effect. Based on these unique features, the authors investigate a firm's optimal selling strategy of smart green products from both the profitability and environmental perspectives.

Design/methodology/approach

The authors establish stylized models to consider the optimality of three selling strategies: (1) traditional strategy – only offering traditional products, (2) green strategy – only offering smart green products, and (3) hybrid strategy – offering both traditional and smart green products.

Findings

The authors’ analysis shows that in the absence of data network effect, there will always be a conflict between profit maximization and environmental protection. However, a strategy that benefits both the firm and the environment exists when data network effect is present. Interestingly, hybrid and traditional strategies can be win-win strategies, but the green strategy cannot. Also surprisingly, the green strategy may harm the environment more as smart products become greener.

Originality/value

This study examines the economic and environmental implications of selling smart green products, and contributes to existing literature on sustainable operations and green product design by incorporating the impact of both consumer environmental awareness and data network effect. The authors’ findings shed light on how to coordinate the profitability and environmental impact of selling smart green products in the era of big data and IoT.

Details

Information Technology & People, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0959-3845

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Article
Publication date: 1 June 2002

Dingkun Ge

Value pricing requires a marketer to price his/her product according to the value the product brings to its user. A product with network effects makes it difficult to…

Abstract

Value pricing requires a marketer to price his/her product according to the value the product brings to its user. A product with network effects makes it difficult to assess the value of the product to its customer, thus presenting a challenge to the value pricing principle. This paper reviews the relevant literatures in value pricing and network effects and provides an integrated model to price products with network effects. The value of a product with network effects is decomposed into two parts: autarky value and synchronization value. Linearly combining the two types of values, the model can price both stand‐alone products (with synchronization value equal to zero) and network products (with or without autarky value).

Details

Journal of Product & Brand Management, vol. 11 no. 3
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 26 November 2020

Khadija Ali Vakeel, Edward C. Malthouse and Aimei Yang

Digital business platforms (DBPs) such as Alibaba and Google Shopping are partnership networks that use the Internet to bring service providers (e.g. retail vendors) and…

Abstract

Purpose

Digital business platforms (DBPs) such as Alibaba and Google Shopping are partnership networks that use the Internet to bring service providers (e.g. retail vendors) and customers together. One of the benefits of DBPs is network effects, in which customers can purchase from multiple providers, giving rise to a unique network. However, few studies have explored which service providers benefit from network effects and which do not.

Design/methodology/approach

Using the theories of transaction costs and network analysis, the authors apply network models to DBPs to understand which service providers benefit from network effects.

Findings

The authors identify three segments of service providers: (1) those with high prominence (connection to providers with high network centrality), (2) those with high network constraint (adjacent to isolated providers) and (3) those with low prominence and constraint. The authors find that segments (1) and (3) benefit from reciprocated customer exchanges, and thus benefit from network effects, while high constraint segment (2) providers do not benefit from reciprocated exchanges. Moreover, the authors find that for segments (2) and (3) future sales have a negative association with unreciprocated customer exchanges, while segment (1) has no significant association between unreciprocated exchanges and future sales.

Research limitations/implications

The authors discuss implications for a multisided platform (MSP), as it decides which service providers to attract, promote and recommend. They can use this study’s results to know which segments of providers will increase network effects to make the platform more valuable.

Practical implications

This paper provides managers of service platforms with strategies for managing relations with their service providers.

Social implications

Service platforms are an important and disruptive business model. The authors need to understand how network effects operate to create efficient platforms.

Originality/value

This paper extends the literature on MSPs by quantifying network effects and showing not all service providers benefit equally on an MSP from network effects. Critical insights into network effects on the MSP are provided, including different ways it can impact provider sales.

Details

Journal of Service Management, vol. 32 no. 4
Type: Research Article
ISSN: 1757-5818

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Article
Publication date: 6 July 2015

Andrés Artal-Tur, Ahmed Farouk Ghoneim and Nicolas Peridy

The purpose of this paper is to study how proximity affects the trade-migration link. By focusing on two case studies, France and Egypt, the authors explore if migrants…

Abstract

Purpose

The purpose of this paper is to study how proximity affects the trade-migration link. By focusing on two case studies, France and Egypt, the authors explore if migrants promote and help to deal with market heterogeneity in international markets. Using an ethnic network approach the authors also test for interactions between the characteristics of migrants and proximity issues.

Design/methodology/approach

The paper builds on two case studies to illustrate the main working hypotheses. The main framework is that of ethnic networks, proximity ties, and market heterogeneity. Static and dynamic panel data methods are employed when estimating extended gravity trade equations. The authors account for country-pair fixed effects and instrument by lagged stocks of migrants, in order to deal with bilateral commonalities and endogeneity issues in the estimation procedure.

Findings

The paper provides evidence on how proximity enhances trade. Additional trade effects are found for countries sharing closer ties. Networks of migrants appear to help firms to deal with fixed trade costs, also generating some market heterogeneity that at the end influences the trade-migration linkage. Characteristics of migrants also seem to matter, interacting with proximity issues, and resulting in specific trade effects.

Practical implications

Proximity issues seem to matter in the trade creation effects of networks of migrants. In this way integration processes between countries would be showing some positive externalities in the side of trade flows. Characteristics of emigrants should be taken into account when defining migratory policies, mainly for the education and assimilation issues.

Originality/value

The paper get deeper insights in some emerging issues in the trade-migration literature by focusing in two relevant case studies.

Details

International Journal of Manpower, vol. 36 no. 4
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 13 February 2017

Dongling Huang, Dmitri G. Markovitch and Yuanping Ying

This paper aims to identify the effects of social learning and network externalities by conditioning on product quality and early sales momentum. This approach is…

Abstract

Purpose

This paper aims to identify the effects of social learning and network externalities by conditioning on product quality and early sales momentum. This approach is demonstrated using film sales data.

Design/methodology/approach

This study used econometric modeling approach.

Findings

It was found that both social learning and network externalities have significant and comparable impacts on film choice. We show that the relative effects of network externalities and social learning in the film market are robust to different momentum and quality definitions and to alternative estimation methods.

Originality/value

Scholars have long argued that social learning plays a key role in new product diffusion. In some product categories, consumer choice may also be influenced by network externalities, meaning that purchasing popular products may provide the consumer utility above and beyond that derived from product usage directly. We propose a novel identification approach to help quantify the relative magnitude of these two effects on new product sales.

Details

European Journal of Marketing, vol. 51 no. 1
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 1 April 2003

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination…

Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Details

Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

Keywords

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