Social networks and online store performance in emerging economies: the mediating effect of legitimacy

Xiaoyu Yu (), Yida Tao (), Yi Chen (), Weiyong Zhang () and Pinglei Xu ()
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Xiaoyu Yu: Shanghai University
Yida Tao: Shanghai University
Yi Chen: Shanghai University
Weiyong Zhang: Old Dominion University
Pinglei Xu: Shanghai University

Electronic Markets, 2019, vol. 29, issue 2, No 6, 218 pages

Abstract: Abstract Although it is well established in the literature that social networks affect firm performance, few studies have quantified the effects on online store performance, particularly in the context of emerging economies. Building upon the framework proposed by Hoang and Antoncic (2003), we developed a model to explore the effects of family ties, tie strength, and structural holes on online store performance. Informed by the organization science literature, we incorporated legitimacy as a mediator in our model. Using empirical data collected from 243 online stores operating on Taobao (the largest e-marketplace in China), we found that (1) family ties have a negative effect on online store performance and legitimacy partially mediates this negative effect, (2) tie strength has a positive effect on online store performance and legitimacy fully mediates this positive effect, and (3) structural holes have a positive effect on online store performance and legitimacy partially mediates this positive effect. These insights contribute to a more in-depth understanding of the relationship between social networks and online store performance in emerging economies. Further, this research empirically validated legitimacy’s mediating effect. We conclude the paper with a discussion of theoretical contributions, managerial implications, and future research directions.

Keywords: Online store performance; Social networks; Family ties; Tie strength; Structural holes; Legitimacy (search for similar items in EconPapers)
JEL-codes: L26 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s12525-019-00333-2

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