Growth of a platform business model as an entrepreneurial ecosystem and its effects on regional development

JinHyo Joseph Yun, DongKyu Won, KyungBae Park, JeongHo Yang and Xiaofei Zhao

European Planning Studies, 2017, vol. 25, issue 5, 805-826

Abstract: This paper analyses the dynamics of platform business models as an entrepreneurial ecosystem and its effects on regional development. Here, we seek to answer the following research questions: (1) What effects do platform business models have on regional development? (2) What factors and structures affect the dynamics of platform business models? (3) How can we describe the dynamics of platform business models in app stores and hotel-booking industries? To answer these questions, the authors first analysed two platform entrepreneurial ecosystems in the smartphone app store industry (Google Play’s Android market and Apple’s App Store) and two ecosystems in the hotel-booking industry (Hotels.com and Booking.com). Second, we analysed the effects of platforms as entrepreneurial ecosystems on the regional development of Daegu Metropolitan City. We used in-depth interview methods with a semi-structured questionnaire, system dynamics (SD) simulation, a literature review, and a statistical analysis as research methods. The results of these analyses yielded the following findings. First, platform business models as economic ecosystems motivate a change of regional development from focused areas to multiple areas, from a hierarchical structure of firms to a network of diverse firms, and from scope and scale economy-based firms leading regional development to creative economy-based firms leading regional development. Second, we identified three category factors that were important in a platform ecosystem, and built up and simulated causal and SD models of these factors. Third, we found that the dynamics of platform ecosystems differ from platform to platform because the openness of platforms produces different effects on firms according to the industry to which they belong.

Date: 2017
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DOI: 10.1080/09654313.2017.1282082

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