Network externality and future usage of Internet services

Abstract

Purpose The purpose of this paper is to investigate different effects of three network externality factors, i.e. local network size, network strength, and total network size, on online messenger, online community, chat room and e‐mail services. Design/methodology/approach In the paper hypotheses are tested with a regression model using a survey data collected from 107 MBA students at a business school in South Korea. Findings The paper finds that the three network externality factors have different effects on the users' future usage intention for the four Internet services. Local network size is significant for online messenger services, local network size and network strength are significant for online community services, and total network size is significant for chat room services. For email services, none of the network externality factors are significant. Research limitations/implications The paper shows that a total network size is an important network externality factor affecting the success of a network. However, users' satisfaction with network services and two additional network externality factors, local network size and network strength, are also important determinants. To generalize the finding, investigations into other network services in other environments and into some offline networks are necessary. Originality/value The paper shows that depending on types of networks, managers can focus on different important network externality factors in managing their networks.

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