Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/214496
Title: ONLINE EXTENSION AND CHANNEL BARGAINING POWER
Authors: LING RUOBING
ORCID iD:   orcid.org/0000-0003-4127-9098
Keywords: Channel Relationship, Bargaining, Multichannel Retailing, Channel Interactions, Online Platforms, Difference-in-Differences
Issue Date: 6-Jul-2021
Citation: LING RUOBING (2021-07-06). ONLINE EXTENSION AND CHANNEL BARGAINING POWER. ScholarBank@NUS Repository.
Abstract: We study whether and how the introduction of an online channel by an upstream manufacturer impacts the bargaining power of the manufacturer vis-à-vis the downstream intermediary in the traditional channel. We leverage data on consumers’ staggered adoption of a large apparel manufacturer’s online channel and use a difference-in-differences approach to empirically identify our results. The results show that the adoption of the online channel enhances the manufacturer’s relative bargaining power, with a 1.5% reduction in commission rates accrued to the offline intermediaries. The increased bargaining power leads to an annual saving of approximately US$1.8 million for the manufacturer. We further demonstrate that the improvement in the manufacturer’s relative bargaining power comes from the increased value of the manufacturer's outside channel options of selling their products over physical stores. By investigating different roles played by the primitives of the online channel (i.e., online sales, the number of online orders fulfilled by the store, and the online return rate), we provide insights for manufacturers about how they can increase their bargaining power and revenue sharing in the traditional channel in the digital age.
URI: https://scholarbank.nus.edu.sg/handle/10635/214496
Appears in Collections:Ph.D Theses (Open)

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