Getting on the Map: The Impact of Online Listings on Business Performance

28 Pages Posted: 16 Dec 2022 Last revised: 4 Jan 2023

See all articles by Michael Luca

Michael Luca

Harvard University - Business School (HBS)

Abhishek Nagaraj

UC Berkeley-Haas

Gauri Subramani

Lehigh University

Multiple version iconThere are 2 versions of this paper

Date Written: December 5, 2022

Abstract

We evaluate the extent to which small businesses maintain an online presence, looking at restaurant listings on a major online review platform. While the majority of restaurants have an online presence, we find that roughly 18 percent in our sample have no presence as of the end of 2017, despite being able to list their business for free. Using temporal variation in a restaurant's online presence as well as a natural experiment arising from a data acquisition that led over a thousand businesses to be added to the platform, we find that maintaining an online presence is valuable for small businesses. Establishing an online presence leads to a 5% revenue increase. Using data on customer reviews post-add, we explore potential channels that could explain why restaurants continue to remain offline despite potential benefits from digital representation. Consistent with models of voluntary disclosure, we find that businesses that had stayed online until the acquisition ended up having lower ratings, on average, than those that added themselves or were added by customers.

Suggested Citation

Luca, Michael and Nagaraj, Abhishek and Subramani, Gauri, Getting on the Map: The Impact of Online Listings on Business Performance (December 5, 2022). Harvard Business School NOM Unit Working Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=4300552 or http://dx.doi.org/10.2139/ssrn.4300552

Michael Luca (Contact Author)

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Boston, MA 02163
United States

HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=ovr&facId=602417

Abhishek Nagaraj

UC Berkeley-Haas ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

Gauri Subramani

Lehigh University ( email )

621 Taylor Street
Bethlehem, PA 18015
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
80
Abstract Views
462
Rank
549,222
PlumX Metrics