The Impact of Asymmetric Multi-Market Competition on Competitive Interactions of User-Generated Content

Thursday, March 21, 2013 ( 4:00 pm to 5:00 pm )

Location: Babbio 104

Howe School Research Colloquium

Gaurav Sabnis, Assistant Professor, Howe School

 

ABSTRACT

This research examines how a continuous measure of competition between two firms moderates the competitive interactions in the UGC-performance relationship. Specifically, I use the airline industry to examine how asymmetric multi-market competition (the number of focal airline routes that the competitor flies on) between dyads of airlines moderate the impact of negative user-generated content (NUGC) about competitors on one another’s abnormal stock returns. I collect data on nine biggest airlines in the United States for a period of 60 months spanning December 2003 to November 2008. I use a
spatio-temporal model to measure the moderating effect of asymmetric multi-market competition on the role that competitors’ NUGC plays in influencing the focal airline’s stock returns. I find that an airline accrues the maximum stock returns benefits from a competitor’s NUGC if the focal airline flies on a higher percentage of the competitor’s routes than the competitor flies on the focal firm’s routes. I also find that airlines engaged in symmetric multi-market competition flying on approximately half of one another’s routes will both benefit from one another’s NUGC. I also find that stock return benefits of competitor’s NUGC are the lowest or negative when the multi-market competition among firms is mutually symmetric but high or mutually symmetric but low. These findings provide evidence of competitive interactions in the impact of UGC on financial performance, demonstrate the nature of the relationship as moderated by a measure of competition, and provide insights to academics and practitioners for shaping online marketing strategies with the competition in mind to maximize the return on marketing investment.

 

BIOGRAPHY

Gaurav Sabnis is an Assistant Professor in Marketing at the Howe School of Technology Management since Fall 2012. Prior to that, he was a Visiting Assistant Professor at Fordham Schools of Business for one year. 

Gaurav got a PhD in Marketing from The Pennsylvania State University in 2011, with a dissertation on marketing strategy implications of competition in social media. His research also focuses on sales force management issues, and in January 2013, his first-authored paper examining the question of the Sales Lead Black Hole was published in the Journal of Marketing, the oldest and most premier journal in the field which is part of the FT-45 list. He also has papers under advanced review at Information Systems Research and Marketing Science, both of which are also on the FT-45 list. In 2012, he also published a chapter about Competition in the Handbook of Marketing Strategy. 

Gaurav has an undergraduate degree in engineering from the University of Pune and an MBA from the Indian Institute of Management Lucknow. He worked for two years as a Sales Manager for IBM in Mumbai before coming to the United States for his PhD. His educational background and work experience in the field of technology shapes his research philosophy, which is at the intersection of technology and marketing in issues such as sales management, social media, and inter-firm competition.

 

For more information email:  Howe.School@stevens.edu