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Size and growth dynamics of online stores: A case of China's Taobao.com

Author:  GAO Baojun(Department of Management Science and Engineering),Wai Kin (Victor) Chan,Lei Chi,Xuefei (Nancy) Deng
Publication:  Electronic Commerce Research and Applications 17 (2016) 161¨C172
Abstract:  This study examines Gibrat's law regarding size¨Cgrowth relationships in the consumer-to-consumer(C2C) online marketplace. Using dynamic panel data models, we analyze 21,948 e-merchants from 14industries on Taobao.com. The data analysis shows that Gibrat's law holds for large and mature stores when their size and age exceed certain threshold, but it generally fails to apply to stores whose size and age are below certain threshold. For those small stores, they grow faster than large ones in the C2C e-commerce. Results of the study provide insights into the competitive dynamics and industry structure of the C2C online marketplace.

¡¾Keywords¡¿Consumer-to-consumer, Dynamic panel data model, Firm growth, Gibrat's law, System GMM, Taobao