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  • 2022
  • Working Paper
  • HBS Working Paper Series

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

By: Michael Luca, Abhishek Nagaraj and Gauri Subramani
  • Format:Print
  • | Language:English
  • | Pages:22
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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.

Keywords

Small Business; Internet and the Web; Revenue; Digital Marketing; Food and Beverage Industry

Citation

Luca, Michael, Abhishek Nagaraj, and Gauri Subramani. "Getting on the Map: The Impact of Online Listings on Business Performance." Harvard Business School Working Paper, No. 23-031, December 2022.
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About The Author

Michael Luca

Negotiation, Organizations & Markets
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More from the Authors
  • Shanty Real Estate: Teaching Note Supplement By: Michael Luca
  • Black Ownership Matters: Does Revealing Race Increase Demand for Minority-Owned Businesses? By: Abhay Aneja, Michael Luca and Oren Reshef
  • Digital Public Health Interventions at Scale: The Impact of Social Media Advertising on Beliefs and Outcomes Related to COVID Vaccines By: Susan Athey, Kristen Grabarz, Michael Luca and Nils Wernerfelt
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