Structure and Liquidity of B2B Hubs: An Industrial Organization Economics Theoretic Framework

B2B exchanges are expected to play an important role in the digital economy. While these exchanges are thought to add value by reducing inefficiencies in industrial procurement, it is unclear the additional value that could be created by them and more importantly, who is likely to appropriate the created value. Drawing from the industrial organization economics perspective of strategy, key forces that are likely to impact the evolution and success of B2B exchanges are identified and a framework to classify B2B hubs based on their neutrality and ownership is proposed. We postulate how the traditional industry structure variables are likely to influence the structure and liquidity of B2B hubs. The hypotheses put forth will be tested using data collected from exchanges in a variety of industries.