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EMAC 2024 Annual


A Rising Tide that Lifts All Boats: The Effects of Collective Recognition Programs on E-Commerce Sellers
(A2024-119806)

Published: May 28, 2024

AUTHORS

Wei Miao, University College London; Liqiang Huang, Zhejiang University; Chris Tang, UCLA; Xuchu Xu, Zhejiang University

ABSTRACT

Taobao launched a unique Taobao Town Certification (TTC) to recognize e-commerce sellers collectively in a particular rural town in China for reaching a critical mass. Unlike other platform certifications that promote individual products or sellers, TTC is a unique collective promotion strategy that advocates all sellers in a specific region. We empirically examine the causal effects of such collective promotion strategies on sellers’ performance. Employing the synthetic difference-in-differences approach, we find that sellers in certified towns experienced substantial increases in annual sales and transaction volumes and the effects compound over time. Next, we uncover salient heterogeneity of treatment effects across regions and sellers of different characteristics: Besides heterogeneity across gender and age groups, we find that sellers in less trusted and less economically developed regions receive more substantial benefits. In addition, TTC is effective only on individual sellers but not enterprise sellers. Finally, we examine the spillover effects on uncertified neighboring towns and discover positive externalities. Our findings have important implications for platforms and policymakers to develop collective recognition programs to support and sustain rural economic development and reduce regional and socioeconomic disparities.