| Searching for the source of sustainable competitive advantage and value creation has long captivated strategic management researchers. Various explanations for superior performance have been advanced, based on industry analysis, value-chain analysis, resource-based theories, and other frameworks. However, the radical changes unleashed by the network-based economy challenges these conventional explanations. I argue that the dynamic involvement of the users/customers and their interaction with the firm will ultimately determine the performance of the firm in the new economy.; Using the case of the Internet, which is the world's largest network, I present a framework which shows that a firm performance depends on both the firm (via value co-production potential) and its users (via perceived characteristics of the transaction). This framework can also explain the performance of various e-business models.; I argue that the higher the value co-production potential of an e-business model, the higher its performance [H.1]. I also argue that the more a user perceives the transaction as relational, the higher the performance of an e-business model [H.2]. Furthermore, the interaction of these two dimensions also will be positively related to the performance of an e-business model [H.3].; Information from various sources, including clickstream data, archival information, and expert ratings, were used to put my hypotheses to an empirical test. Using hierarchical regression, I found that Hypotheses 1 and 2 were statistically supported but that Hypothesis 3, was not. The results will help researchers and practitioners understand a new source of value creation and provide a method for predicting potential success factors from among various e-business models. |
