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

Author

Listed:
  • Xiaoyu Yu

    (Shanghai University)

  • Yida Tao

    (Shanghai University)

  • Yi Chen

    (Shanghai University)

  • Weiyong Zhang

    (Old Dominion University)

  • Pinglei Xu

    (Shanghai University
    Guilin University of Aerospace Technology)

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.

Suggested Citation

  • Xiaoyu Yu & Yida Tao & Yi Chen & Weiyong Zhang & Pinglei Xu, 2019. "Social networks and online store performance in emerging economies: the mediating effect of legitimacy," Electronic Markets, Springer;IIM University of St. Gallen, vol. 29(2), pages 201-218, June.
    • Handle: RePEc:spr:elmark:v:29:y:2019:i:2:d:10.1007_s12525-019-00333-2
    DOI: 10.1007/s12525-019-00333-2
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    Cited by:

    1. Xiongfei Cao & Sohail Chaudhry & Li Xu, 2019. "Electronic markets in emerging markets," Electronic Markets, Springer;IIM University of St. Gallen, vol. 29(2), pages 151-152, June.

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    More about this item

    Keywords

    Online store performance; Social networks; Family ties; Tie strength; Structural holes; Legitimacy;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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