Peer Effects of Internet Business Models: Strategic Drive or Conceptual Catering?

Abstract

In recent years, the internet business model has become a popular concept, and has been adopted by an increasing number of traditional enterprises. However, the question remains whether this adoption is a strategy-driven decision or a blind follow of trends. Therefore, this study is conducted on Chinese listed companies from 2007 to 2020 to examine the existence, underlying motives, and economic consequences of peer effects in traditional enterprises adopting internet business models. The results show significant peer effects among traditional enterprises adopting internet business models. The examination of driving mechanisms reveals that peer effects of internet business models are more significant in enterprises with asset-light structures, higher degrees of virtualization, lower market valuations, and greater financing pressure, supporting the conceptual catering hypothesis rather than the strategic drive hypothesis. Further tests reveal that while adopting internet business models enables enterprises to receive some government subsidy and market reaction in the short term, it only promotes tactical innovation rather than real innovation and does not improve the financial performance of these enterprises. This further indicates that peer effects of internet business models are not a strategic drive but rather a matter of conceptual catering.

Keywords

internet business model / peer effect / traditional enterprises / strategic drive / conceptual catering

RIGHTS & PERMISSIONS

2024 Higher Education Press