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How Does Information Transmission Influence the Value Creation Capability of a Digital Ecosystem? An Empirical Study of the Crypto-Digital Ecosystem Ethereum

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  • He Huang

    () (Business School, Nankai University, Tianjin 300071, China)

Abstract

With the advancement of digitization, digital ecosystems are playing an increasingly important role in value creation. The mechanism by which digital ecosystems create value, however, has been generally deemed to be a mixed effect due to various factors. On the basis of signaling theory, this paper explores the effect of information transmission on the value creation capability of a digital ecosystem from two dimensions: the scale and sustainability of value creation. Taking a sample of weekly transaction data from Ethereum during August 2015–August 2018, our research proposes an integrated framework of information transmission in value creating, and discusses the diffusion process of the network effect within the digital ecosystem. As a generally accepted exchange medium, digital currency traffic acts as an observable proxy of information flow in a crypto-digital ecosystem, where the effects of heterogeneity in transaction attributes are filtered. Empirical results show that information transmission positively influences the scale and sustainability of value creation activities in a digital ecosystem by affecting user number and transaction frequency. Further research reveals that user number is the initial driving force of the network effect and a critical factor for the overall ecosystem market capitalization. This research provides a new insight into the design of sustainable value creation mechanisms under digital circumstances.

Suggested Citation

  • He Huang, 2019. "How Does Information Transmission Influence the Value Creation Capability of a Digital Ecosystem? An Empirical Study of the Crypto-Digital Ecosystem Ethereum," Sustainability, MDPI, Open Access Journal, vol. 11(19), pages 1-16, September.
  • Handle: RePEc:gam:jsusta:v:11:y:2019:i:19:p:5345-:d:271388
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    References listed on IDEAS

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    More about this item

    Keywords

    digital ecosystem; digital currency; value creation; crypto-economy; network effect; information transmission;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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