Impact of Industry Structure and Product Characteristics on the Structure of B2B Vertical Hubs

Abstract

Business-to-business (B2B) vertical hubs are expected to play an important role in the digital economy and add value by reducing inefficiencies in industrial procurement and enabling efficient interfirm interactions and collaborations. The last few years have witnessed both a proliferation of business models underlying these hubs and the failure of many of these hubs. This study identifies key structural dimensions of vertical hubs and develops a conceptual framework to characterize vertical hubs. We draw from the industrial organization theory and the marketing literature to examine the relationship between the characteristics of the vertical hubs, those of the industries they serve, and the products transacted through the hubs. Based on data collected from 63 B2B vertical hubs, we test our hypotheses relating industry and product characteristics to the structure of vertical hubs. The results provide modest support to our theoretical proposition that the characteristics of vertical hubs are likely to be shaped by the industry and product characteristics. We interpret the results and discuss the implications of the study for research and practice.

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