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Performance effects of innovation in two-sided markets: The paradigmatic case of OTAs
Institution:1. Howard Feiertag Department of Hospitality and Tourism Management, Pamplin College of Business, Virginia Tech, Blacksburg, VA, 24061, USA;2. Dedman College of Hospitality, Florida State University, Tallahassee, FL, 32306, USA;1. Lecturer in Tourism and Management, School of Hospitality Management and Tourism, Technological University of Dublin, Ireland;2. Professor of Management Practice, RIKON, School of Business Waterford Campus South East Technological University, Ireland;1. Department of Tourism Management, School of Business Administration, Zhongnan University of Economics and Law, China;2. Department of Tourism and Hospitality Management, Temple University, Philadelphia, PA, USA;1. Department of Tourism, Hotel and Sport Management, Griffith University, 170 Kessels Road, Nathan, QLD, 4111, Australia;2. Department of Tourism Management, Torrens University, 88 Wakefield St, Adelaide, SA, 5000, Australia;1. Department of People & Organisations, Bournemouth University Business School, D122, Talbot Campus, Bournemouth University, Poole, Dorset, BH12 5BB, UK;2. School of Management, Jinan University, 601 West Huangpu Avenue, Tianhe District, Guangzhou, Guangdong, China;1. Department of Information Systems and Business Analytics, Deakin University, Australia;2. College of Business Administration, Hunan University, China;3. School of Information Technology, Deakin University, VIC, 3125, Australia;4. Asia-Pacific Academy of Economics and Management, Department of Integrated Resort and Tourism Management, Faculty of Business Administration, University of Macau, China
Abstract:Online Travel Agents (OTAs) play an important intermediary role in the two-sided travel distribution market. A critical factor that enhances a firm's competitive advantage is innovation. Yet, the analysis of innovation in the OTA context is scarce. The main objective of this article is to fill this gap and examine the effect of OTA innovations on firm performance. We analyze the effect of two-sided market specific innovations (same-side and cross-side) on performance and contribute to the literature by expanding the theoretical understanding of innovations. We find that producer-to-consumer innovations have a greater effect on OTA performance than producer-to-producer and consumer-to-consumer innovations. A fundamental managerial implication is that exchange management is an area to be enhanced when innovating in travel market distribution.
Keywords:Innovation  Performance  Online travel agency  Intermediation  Distribution
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