Abstract
As the influence of online reviews on customers is drastically increasing, their financial impact and factors on review attributes have been examined in hospitality literature. Online reviews have been highlighted as an important cue that drives firm performance, but little attention has been made to the dynamic interconnections of online reviews with other cues that are likely to be used simultaneously. This study therefore investigated the multifaced relationship between online reviews and brand in the restaurant context. Two-stage least squares analysis was applied to analyze the effect of these two cues on financial performance of 1,210 Iowa restaurants from 2010 to 2017. Our analysis showed that the financial impact of positive reviews decreased in the presence of brand and that customer engagement in online reviews was different depending on brand strength. Based on the findings, restaurant managers are advised to shift the focus of marketing strategies as brand strength grows.
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