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Turco, Catherine J.

doi:10.7312/turc20928

Cited by 1 publication

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“…Accordingly, research has also demonstrated that housing prices are correlated with both the quantity and quality of restaurants in a neighborhood (Kuang, 2017). Some have thus argued that restaurants can be a catalyst or predictor of urban development, change, and gentrification (e.g., Carroll & Torfason, 2011; Glaeser et al, 2017; Turco, 2023; Zukin et al, 2017). Urbanist Jacobs (1961) noted long ago that residents are quick to refer to local restaurants as a sign of the vitality and appeal of their communities.…”

Section: The Empirical Setting: the New York City Restaurant Industrymentioning

confidence: 99%

Rating systems and increased heterogeneity in firm performance: Evidence from the New York City Restaurant Industry, 1994–2013

Greenberg,

Sands,

Cattani

et al. 2023

Strategic Management Journal

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Research SummaryWe investigate the extent to which the increasing availability of ratings information has affected heterogeneity in firm performance and, if so, what market segments are responsible for these changes. A unique dataset was constructed with restricted‐access government data to examine these questions in the context of the New York City restaurant industry between 1994 and 2013. We find that firms serving tourist and expensive price point market segments experienced increasing sales discrepancies as a function of rating differentials when ratings information became more easily accessible with the advent of online rating platforms. These findings depict how the prevalence of online rating systems have shaped competition and value capture, thus providing insight into the determinants of firm performance heterogeneity.Managerial SummaryWe examine the extent to which increasing availability of ratings information has affected firm performance by estimating changes in comparative sales between New York City restaurants between 1994 and 2013. Analyses indicate that increased access to ratings information during this period had a considerable effect on comparative sales for firms serving the tourist and the expensive price point market segments. These results provide insights into other industries where access to evaluations and rating systems have also increased. This work suggests that online ratings have affected how firms compete and capture value, and managers have opportunities to use rating systems to their advantage.

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