THE ECONOMIC VALUE OF ONLINE NETWORKS: EVIDENCES FROM SOCIAL MEDIA AND ELECTRONIC COMMERCE

Abstract

The rapid development of information technology has facilitated the emergence of social media-enabled social networks and electronic commerce-enabled product networks, and also the popularity of online recommendations via human beings and systems. Despite firms¿ popular use of online networks and online recommendations for greater business performance, there has been little research work investigating their economic impact. This research conducts two empirical studies to examine how user interactions or recommendations in social media-enabled social networks affect consumer purchase behavior, and how structures of electronic commerce-enabled product recommendation networks influence product demand. The notable findings from this research provide significant contributions to the literature on the economic value of online networks and online recommendations, and offer important guidance to firms¿ online network-based and recommendation-based business strategies.