Getting on the Map: The Impact of Online Listings on Business Performance

We evaluate the extent to which small businesses maintain an online presence, looking at restaurant listings on a major online review platform. While the majority of restaurants have an online presence, we ﬁnd that roughly 18 percent in our sample have no presence as of the end of 2017, despite being able to list their business for free. Using temporal variation in a restaurant’s online presence as well as a natural experiment arising from a data acquisition that led over a thousand businesses to be added to the platform, we ﬁnd that maintaining an online presence is valuable for small businesses. Establishing an online presence leads to a 5% revenue increase. Using data on customer reviews post-add, we explore potential channels that could explain why restaurants continue to remain oﬄine despite potential beneﬁts from digital representation. Consistent with models of voluntary disclosure, we ﬁnd that businesses that had stayed oﬄine until the acquisition ended up having lower ratings, on average, than those that added themselves or were added by customers.