Helping Small Businesses become more Data-Driven: A Field Experiment on eBay

Sagit Bar-Gill, Erik Brynjolfsson and Nir Hak

No 31089, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: As more and more activities in the economy become digitized, analytics and data-driven decision-making (DDD) are becoming increasingly important. The adoption of analytics and DDD has been slower in small-to-medium enterprises (SMEs) compared to large firms, and reliable causal estimates of the impacts of analytics tools for small businesses have been lacking. We derive experiment-based estimates of the effect of an analytics tool on SME outcomes, analyzing the randomized introduction of eBay’s Seller Hub (SH), a data-rich seller dashboard. We find that SH adoption is associated with increased DDD, and that access to SH increases e-retailers’ revenues by 3.6% on average, as more items are transacted and service quality increases, without increases in average prices. Our results suggest that analytics and DDD help SMEs establish a competitive advantage. Managerial practices play an important role in reaping the benefits from the analytics dashboard, as over a third of the SH impact is driven by active performance monitoring. This suggests that digital platforms could increase revenues by supporting the adoption of analytics tools by SMEs. Furthermore, policies supporting small businesses' transition to the data era could address gaps in analytics and data-driven decision-making (DDD) by providing access to tools such as SH, as well as offering appropriate managerial training.

JEL-codes: L1 L86 M15 M3 O3 O30 (search for similar items in EconPapers)
Date: 2023-03
New Economics Papers: this item is included in nep-ent, nep-exp, nep-hrm, nep-pay and nep-sbm
Note: PR
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Journal Article: Helping Small Businesses Become More Data-Driven: A Field Experiment on eBay (2024)
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