Small Firms and Digital Platforms

43 Pages Posted: 11 Oct 2023

See all articles by Nishant Chadha

Nishant Chadha

Indian School of Business (ISB), Hyderabad

Viswanath Pingali

Indian Institute of Management, Ahmedabad

D. Daniel Sokol

USC Gould School of Law; USC Marshall School of Business

Date Written: September 16, 2023

Abstract

We investigate strategies for small businesses using digital platforms for advertising and sales. We rely on primary data from a quantitative survey of small business startups and a few in-depth interviews of small business owners. We find that small firms prefer digital platforms for advertising and sales over conventional methods. As firms grow, while they continue to rely on digital advertising, their preference for conventional advertising (radio, television, etc.) increases. We find a strong correlation between the geographical spread of small firm sales, including exports, and their propensity to use digital platforms. We also find that small businesses multihome on both advertising and sales platforms. Multihoming occurs across established platforms and between established and nascent platforms. Our results enhance the understanding of how small firms rely on platforms and inform the policy debates on platform regulation.

Keywords: Small businesses, multihoming, digital platforms, entrepreneurship and expansion

Suggested Citation

Chadha, Nishant and Pingali, Viswanath and Sokol, D. Daniel, Small Firms and Digital Platforms (September 16, 2023). USC CLASS Research Paper No. 24-5, Available at SSRN: https://ssrn.com/abstract=4573570. or http://dx.doi.org/10.2139/ssrn.4573570

Nishant Chadha (Contact Author)

Indian School of Business (ISB), Hyderabad ( email )

Hyderabad, Gachibowli 500 019
India

Viswanath Pingali

Indian Institute of Management, Ahmedabad

D. Daniel Sokol

USC Gould School of Law ( email )

699 Exposition Boulevard
Los Angeles, CA 90089
United States

USC Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States

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