Closed or open platform? the nature of platform and a qualitative comparative analysis of the performance effect of platform openness.

Abstract

Internet platform enterprises have become one of the dominant organizational forms for internet-based businesses. Despite the strategically crucial role that openness decision plays for Internet platform enterprises, the results of existing research on the relationship between platform openness and platform performance are not conclusive. As to the nature of platform, its transaction attribute has been overemphasized while its innovation attribute is mostly neglected. Through decomposing platform openness into supply-side openness and demand-side openness, as well as introducing demand diversity and knowledge complexity as contextual variables, this study attempts to understand the impact of both types of attributes on performance by considering their configuration. Using fuzzy sets qualitative comparative analysis (fsQCA) method, we find that high demand diversity of platform users and high supply-side openness will lead to better platform performance. Moreover, the high knowledge complexity required for platform innovation together with high supply-side and demand-side openness will contribute to a high level of platform performance.