Logotipo NIPE



Are online platforms killing the offline star? Platform diffusion and the productivity of traditional firms

Guest speaker

Hélia Costa (OECD)




Start10.02.2021 12:00End10.02.2021 13:00

Type of registration

Online via E-mail

More information

Know more

Event summary

Online platforms are a key element of digitalization, with an increased presence worldwide. Yet research on what determines their success and their implications for economic outcomes is scarce and often limited to case studies and advanced countries. This paper presents a cross-country and cross-industry analysis of platform diffusion and its impact on the productivity of traditional businesses. Using web-traffic information, we construct a comprehensive database of the uptake of online platforms across nine sectors and 43 countries, comprising both advanced and emerging economies, from 2013 to 2019. We use this data along with firm-level information to analyze whether and under which conditions platform uptake is associated with changes in incumbent firms’ productivity. We find that firms in sectors with larger platform diffusion have higher productivity growth, and that these effects are driven by increases in value added rather than reductions in employment. They are greater for SMEs and for firms in the middle of the productivity distribution. This supports the view that online platforms can play an important role in levelling the playing field between SMEs and large companies and closing productivity gaps between least and most productive firms. Finally, productivity gains are stronger in areas of activity with a higher degree of reshuffling among the largest online platforms, underlining the importance of market dynamism in generating productivity gains for incumbent businesses.