Determinants of Online Word-of-Mouth: Evidence from Durable Goods Market
Online reviews have become one of the most effective tools to influence consumer behavior and level of sales. In this paper we consider determinants of online reviews and ratings. The study is based on more than three thousand online reviews from Russian consumers of durable goods (electronics and home appliances). We found a significant difference in the level of influence between new and old reviews. Moreover, the higher the total numbers of reviews available, the higher the number of reviews taken into account by a particular consumer. Another finding is that both average online rank and price of a product are positively correlated with variance of reviews about that product. Based on differences in the effectiveness of information transmission about quality, products were divided into two categories: experience goods and search goods. We provide an econometric model that helps explain not only the dynamic but also the direction of consumers’ ranking of a product depending on the number and content of existing reviews.
Purpose: This study examines the role and influence of online reviewers’ cultural traits and perceived experience on online review ratings of Russian hotels by taking a direct measurement approach.
Design/methodology/approach: We adopt an Explanatory Sequential Research Design consisting of two stages. In the first stage, based on an a sample of almost 75,000 Booking.com online reviews covering hotels located in Moscow (Russia) we examine quantitatively to what extent the cultural traits of online reviewers and hotel guests’ perceived experience in online reviewing affect online ratings using also censored regressions. In the second stage, we interpret the results in light of semi-structured interviews conducted with a convenience sample of managers.
Findings: Each of the Hofstede’s cultural dimensions (namely individualism, masculinity, uncertainty avoidance and power distance) exerts a significantly negative influence on the hotel online ratings. More specifically, the higher the levels of individualism, masculinity, uncertainty avoidance and power distance, the lower hotel online ratings. Reviewers’ perceived experience in online reviewing is negatively related to online ratings.
Research limitations/implications: The findings bear relevant managerial implications for hotel managers and online platform managers in countries that are not typically covered by online consumer behavior studies in hospitality such as Russia. From a theoretical viewpoint, we contribute to cultural studies in hospitality management and marketing with a further development of the nascent research stream taking a direct measurement approach to the study of cultural influences on consumers’ behaviors. Furthermore, we contribute to a better understanding of the role of cultural traits on eWOM, as well as international market segmentation theory in online settings.
Practical implications: The analysis conducted helps managers in the hospitality sector as well as platform managers and software developers to make sense of multiple individual reviewers’ features including cultural traits, and perceived experience in online ratings.
Originality/value: The conjoint exploration of the effects of cultural differences and perceived experience in online reviewing adds to the nascent research stream taking a direct measurement approach to the study of the Hofstede’s cultural dimensions on online consumers’ behaviors. We make multiple theoretical and methodological contributions, highlighting that online hospitality customers cannot be considered as one homogeneous mass. Instead, the application of Hofstede’s cultural dimensions allows identifying distinctively different online behaviors across international online customers: different online customer groups can be clustered into segments as they display different online behaviors and give different online evaluations.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.