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

27 Pages Posted: 2 Jan 2023 Last revised: 14 Apr 2023

See all articles by Michael Luca

Michael Luca

Harvard University - Business School (HBS)

Abhishek Nagaraj

University of California, Berkeley

Gauri Subramani

Lehigh University

Multiple version iconThere are 2 versions of this paper

Date Written: December 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 offline until the acquisition ended up having lower ratings, on average, than those that added themselves or were added by customers.

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Suggested Citation

Luca, Michael and Nagaraj, Abhishek and Subramani, Gauri, Getting on the Map: The Impact of Online Listings on Business Performance (December 2022). NBER Working Paper No. w30810, Available at SSRN: https://ssrn.com/abstract=4316294

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

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

Gauri Subramani

Lehigh University ( email )

621 Taylor Street
Bethlehem, PA 18015
United States

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