How does Business Model Matter for Technology-based SMEs? An Optimal Distinctiveness Perspective

Abstract

In this article, we introduce the optimal distinctiveness perspective to the business model literature. We argue that distinctiveness in business model design have a nonlinear effect on performance of technology-based SMEs. Specifically, we highlight the distinctiveness in efficiency-centered and novelty-centered business model designs, which are two critical themes attracted the attention of many mainstream researches. To test our hypotheses, we develop a dataset that measures the distinctiveness in efficiency-centered and novelty-centered business model design of 385 technology-based SMEs in nascent market listed on National Equities Exchange and Quotations (NEEQ) market in China. Results show a U-shaped effect of distinctiveness in efficiency-centered business model design and an inverted U-shaped effect of distinctiveness in novelty-centered business model design on performance of technology-based SMEs. In addition, the local density within the industry positively moderates these relationships. These findings provide new insights into business model literatures and the optimal distinctiveness perspective