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Reputation and new venture performance in online markets: The moderating role of market crowding

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  • Taeuscher, Karl

Abstract

Reputation represents an important driver of new venture performance. This article shows that the performance benefits of reputation are substantially contingent on ventures' market conditions. My study of 797,087 sales transactions by 5760 new ventures in 119 platform-mediated online markets provides strong evidence that market crowding attenuates the reputation–performance relationship. Ventures benefit 38% to 42% more from a favorable reputation when they compete in an uncrowded (versus crowded) market. By disentangling the underlying mechanisms of reputation, my study allows for more accurate predictions about why, when, and how ventures benefit from reputation.

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  • Taeuscher, Karl, 2019. "Reputation and new venture performance in online markets: The moderating role of market crowding," Journal of Business Venturing, Elsevier, vol. 34(6).
    • Handle: RePEc:eee:jbvent:v:34:y:2019:i:6:s0883902618301344
    DOI: 10.1016/j.jbusvent.2019.06.005
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    3. Xuelin Chen & Dongmei Zhou & Ziying Zhan & Ruoyu Lu, 2023. "When Do You Enter? Entrepreneurial Firms’ Entry Timing and Product Performance in the Digital Platform Market," Sustainability, MDPI, vol. 15(6), pages 1-18, March.
    4. Ruey‐Jer “Bryan” Jean & Daekwan Kim, 2021. "Signalling Strategies of Exporters on Internet Business‐to‐Business Platforms," Journal of Management Studies, Wiley Blackwell, vol. 58(7), pages 1869-1898, November.
    5. Juan Martín-Miguel & Camio Prado-Román & Gabriel Cachón-Rodríguez & Lilliana L. Avendaño-Miranda, 2020. "Determinants of Reputation at Private Graduate Online Schools," Sustainability, MDPI, vol. 12(22), pages 1-18, November.
    6. Ruey-Jer “Bryan” Jean & Daekwan Kim & Kevin Zheng Zhou & S. Tamer Cavusgil, 2021. "E-platform use and exporting in the context of Alibaba: A signaling theory perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(8), pages 1501-1528, October.
    7. Karl Taeuscher & Eric Yanfei Zhao & Michael Lounsbury, 2022. "Categories and narratives as sources of distinctiveness: Cultural entrepreneurship within and across categories," Strategic Management Journal, Wiley Blackwell, vol. 43(10), pages 2101-2134, October.
    8. Zhu, Zujun & Huang, Qian & Liu, Hefu, 2023. "How heuristic cues impact crowdfunding performance: The moderating role of platform competition intensity and platform demand potential," Journal of Business Research, Elsevier, vol. 160(C).
    9. Janisch, Jonas & Vossen, Alexander, 2022. "Categorically right? How firm-level distinctiveness affects performance across product categories," Journal of Business Venturing, Elsevier, vol. 37(4).

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