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SUMMARY:Online seminar – The value of information in competitive markets
 : The impact of big data on small and medium enterprises - Ricard Gil\, As
 sociate Professor and Distinguished Faculty Fellow of Business Economics\,
  Smith School of Business\, Queen’s University
DTSTART:20211124T150000Z
DTEND:20211124T160000Z
UID:TALK166153@talks.cam.ac.uk
CONTACT:Emily Brown
DESCRIPTION:A firm may gain competitive advantage over its rivals through 
 access to market information. Yet\, evidence thus far suggests only large 
 firms invest in technology that facilitates access to information\, potent
 ially increasing their leverage over smaller competitors. This paper aims 
 to fill a gap in the literature by empirically investigating how the perfo
 rmance and decision making of small and medium size enterprises change whe
 n gaining access to strategically valuable market information. To do so\, 
 we evaluate the impact of an unprecedented Big Data information service di
 ffused at zero cost by a large European bank among its small and medium si
 ze business customers. Upon programme adoption\, adopting firms had monthl
 y access to reports elaborated by the bank with rich information about eac
 h firm’s clientele portfolio and that of its competitors analysing Big D
 ata credit card transactions. Using first differences\, we find adoption i
 s associated with a 4.5% increase in establishment revenue\, whereas IV es
 timation results show that adoption causally increases revenue by 9% for t
 hose establishments whose adoption decision is most strongly affected by t
 he instrument. The main mechanism behind this result appears to be the inf
 ormation technology prompting establishments to target existing\, yet unex
 ploited\, business opportunities. Consistent with this mechanism\, we find
  that adopting establishments increase their sales to customer segments fr
 om underrepresented gender age groups in their customer portfolio prior to
  adoption. Our evidence also suggests that adopting establishments improve
 d their resource allocation efficiency between weekly peak and off peak ti
 mes. These findings suggest that small and medium enterprises obtain subst
 antial returns from information access\, and therefore\, managerial inatte
 ntion and high adoption costs are likely to be key barriers preventing sma
 ll firms from investing in resources to acquire and analyse market informa
 tion.\n\n\n
LOCATION: Via Zoom
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