Understanding the ego network structure of followers in social marketplaces: Structural capital or liability?

Abstract

In social marketplaces, follower network is one of the most important digital assets that an online seller owns. The existing literature repeatedly reports the strong positive effect of the number of followers on seller performance. However, to date, limited research has been done to understand the ego network structure of a seller’s follower network. The structure of social network may characterize different resources that a seller can leverage to enhance its sales performance. This research studies three network structural properties, including network density, network component and fragmentation, and network centralization, and their impacts on seller performance. A panel data of 1,150 sellers were collected and analyzed. The results show that network density, and centralization are negatively related to seller performance. This suggests that sellers in social marketplaces should avoid highly dense and centralized network when they build and maintain their follower network.