The influence of the sharing economy on sustainable performance : the moderating roles of familiarity, culture and innovation

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Author: Jord X.F.M. Dijkstra Student ID: 11739231

Date of Submission: 22nd of June 2018, Final version MSc Business Administration – International Management

University of Amsterdam Supervisor: Mashiho Mihalache

Second Reader: Niccolò Pisani

The Influence of the Sharing Economy on

Sustainable Performance: The moderating roles

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Statement of originality

This document is written by Student Jord Dijkstra who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

Acknowledgements

I would like to express my appreciation towards my supervisor Mrs Mashiho Mihalache, Assistant Professor of International Management at the University of Amsterdam, for her constructive feedback and guidance which played an essential role in the writing of my thesis.

Furthermore, I also wish to thank my family for their support and my friends who took the time to proofread my thesis and helped me to improve the structure and quality.

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Abstract

The sharing economy is an economic system that converges around activities facilitated by digital platforms that enable peer-to-peer access to goods and services for free or for a fee. Recent economic changes made it possible for the sharing economy to flourish. Firstly, economic alternatives were sought by consumers because of the global financial crisis of 2008. Secondly, accessing alternatives became effortless due to internet technology and social media. Lastly, consumers became more economically, environmentally and ethically aware of the efficient consumption platforms as a consequence of consumers being more conscious about the depleting natural resources and turned away from over-indulgence and ownership.

This study aims to shed light on this phenomenon and argues that engagement in the sharing economy increases a country’s sustainable performance. This paper advances prior sharing economy literature by examining this primary relationship and how familiarity, culture and innovation moderate it. Using data from the EU Open Data Portal aggregated to the country level from a total sample of 26,642 individuals dispersed over the European countries, the empirical results do not show support for the hypothesised positive effect of engagement in the sharing economy on sustainable performance. Furthermore, the findings do not show evidence for the moderating effects of familiarity, culture or innovation. Thus, this study contributes to the academic literature by shedding more light on the relationship between engagement in the sharing economy and sustainable performance. Moreover, this work provides implications for both academic and managerial relevance as well as limitations and suggestions for future research.

Keywords: Sharing economy, collaborative consumption, collaborative economy, peer to peer economy, access economy, sustainable performance, environment, sustainability

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1. Introduction

Over the last years, a phenomenon has occurred in which companies alter their way of doing business. One example could be Uber, one of the largest taxi firms, owns no cars. Another, Facebook, the famous media company, creates no content. Also, Alibaba, one of the most valuable retailers, has no stock. Finally, Airbnb, the largest accommodation provider, has no property. This anomaly describes the peer to peer sharing of access to underutilised goods and services, which prioritises utilisation and accessibility over ownership (Cheng, 2016; Schor & Fitzmaurice, 2015). This phenomenon is called the “sharing economy”.

The sharing economy is an exciting subject because it is a substantial growing market and has become exceedingly popular. In 2015, Lancefield, Hawksworth, & Vaughan (2016) expected that the sharing economy would grow at a rapid pace and that companies should make use of sharing economy platforms to become more sustainable and offer more sustainable alternatives for consumers. However, people have already been engaged in sharing for a long time. Therefore, the sharing economy is not something new (Belk, 2010). Over the years, the term sharing redefined itself and expanded into the “sharing economy” as a result of the internet and the many people now permanently connected via, for example, smartphones (Belk, 2014b).

However, although it is becoming a popular term, there seems to be little agreement on what the sharing economy precisely is and how to define it. Nevertheless, scholars do agree on one point. They agree that the sharing economy is hard to define and that it is hard to draw clear theoretical and practical boundaries (Acquier, Daudigeos, & Pinkse, 2017). Every author has a different interpretation of what defines the sharing economy and what kind of services or goods should be under the term sharing economy. As a result, it has become a large tree with many branches. Noticing that a lot of the companies with sharing economy principles charge for their

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5 services, Bardhi & Eckhardt (2015) argue that the term “sharing” should be changed into “access”.

Despite the ongoing debate of how to define the sharing economy, the Oxford English Dictionary added a definition in 2015: “an economic system in which assets or services are shared between private individuals, either free or for a fee, typically by means of the Internet” (Oxford English Dictionary, 2015; Parente, Geleilate, & Rong, 2017). The definition given by the Oxford English Dictionary incorporates two essential features that this paper will use to bring the existing literature closer together. 1) assets or services are shared between individuals for free or a fee, and 2) transactions are mediated through the internet. As presented throughout this paper, this is a definition that is widely used by authors (Cusumano, 2017). Furthermore, the sharing economy is a blueprint for a future business idea that explains how to connect economic, environmental and social issues (Daunorienė, Drakšaitė, Snieška, & Valodkienė, 2015).

In 2011, Time magazine recognised the sharing economy as one of the ten global world changers (Walsh, 2011). Even though this phenomenon was still in the early stages at that time, Schor (2010) and Gansky (2011) predicted that the sharing economy has the potential to improve sustainability and decrease the carbon and ecological footprints in key areas. Bardhi & Eckhardt (2012) theorise that individuals that participate in sharing-based practices might have a firm intention for sustainable consumption. Habibi, Davidson, & Laroche (2017) share this viewpoint and Hamari, Sjöklint, & Ukkonen (2016) clarify that it is one of the drivers behind people’s participation in the sharing economy.

Ownership is no longer the ultimate expression of consumer desire (Bardhi & Eckhardt, 2012; Chen, 2009). Three main factors have helped with the growth of the sharing economy. Firstly, more conservative and economic alternatives were sought by consumers owing to the global financial crisis of 2008. Secondly, these alternatives were made more accessible and

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6 more efficient owing to the development of internet technology and opportunities on social media. Lastly, consumers became more economically, environmentally and ethically aware of the efficient consumption platforms by the cause of consumers being more conscious about the depleting natural resources and turned away from over-indulgence and ownership (Bardhi & Eckhardt, 2012; Botsman & Rogers, 2010). The reasons mentioned earlier suggest that people are aware of their buying power. In turn, their buying power can affect sustainable performance as a result of consumers seeking cheaper and more sustainable options. Amit & Zott (2001) show that people who trust an e-business will come back to use it in the future.

This paper theorises that if people engage in sharing economy activities, the sustainable performance of a country will increase.

Besides engagement in the sharing economy and sustainable performance, Habibi, Kim, & Laroche (2016) theorise that familiarity is another factor that might affect the participation in the sharing economy. To the writer’s knowledge, no empirical research has been done on this matter. Empirical research that has been conducted on access-based sharing or commercial sharing (Bardhi & Eckhardt, 2012; Lamberton & Rose, 2012) found that there are rather significant inconsistencies concerning the consumer participation in the sharing economy (Botsman & Rogers, 2010; Gansky, 2010; Richardson, 2015). However, empirical evidence also demonstrates that numerous factors, addressed by authors in their research on the sharing economy, show little impact on an individual’s participation in the sharing economy (Bardhi & Eckhardt, 2012; Lamberton & Rose, 2012). Therefore, there are many mixed perceptions as to why people participate in the sharing economy.

Davidson, Habibi, & Laroche (2017) conducted a study on whether there is a difference across cultures accepting the sharing economy in their country. These authors based their study on the American and Indian culture, and they found significant differences between those two due to the different cultures. The limited existing scholarly research on the sharing economy

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7 has only focused on the American consumers (Bardhi & Eckhardt, 2012; Chen, 2009; Davidson et al., 2017; Habibi et al., 2017; Lamberton & Rose, 2012). Therefore, this paper investigates whether the same moderator of culture influences the relationship between engagement in the sharing economy and sustainable performance in Europe.

Internet platforms, on their own, are recognised as a means of innovation considering that they form innovative processes by providing a technological platform on which other users can implement products or services (Gawer & Cusumano, 2014). Via these internet platforms, the sharing economy promotes a more reasonable and sustainable distribution of resources. This is made possible by reducing the costs of accessing products and services and consumer demand for these more reasonable and sustainable resources (Botsman & Rogers, 2010; Martin, 2016).

Summing up the literature, it shows that the sharing economy does not have a precise definition. There has been little research on this phenomenon and while authors suggest that engagement in the sharing economy increases sustainable performance since the consumers of the sharing economy are seeking sustainable options, and cheaper alternatives, not enough research has been conducted on this matter. Hence, this study aims to address these gaps, and the Research Question that this paper will address is as follows:

Does engagement in the sharing economy increase a country’s sustainable performance and do familiarity with the sharing economy, culture and innovation have an impact on this relationship?

To test the impact of engagement in the sharing economy on a country’s sustainable performance and the characteristics that moderate this relationship, a hierarchical regression is conducted on data acquired from EU Open Data Portal and aggregated to the country level for each of the 28 individual European countries. It is particularly interesting to research the sharing economy in Europe because the sharing economy activities are expanding across Europe and

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8 have generated platform revenues of €4 Billion and facilitated €28 Billion of transactions within Europe (Lancefield et al., 2016). Additionally, Lancefield et al. (2016) project that the sharing economy will grow 35 per cent per year, which is approximately ten times faster than the economy as a whole, and anticipate that the value of transactions will grow up to €570 billion and the platform revenues towards €83 billion.

This study contributes to the existing literature in multiple ways. First, this paper is empirically testing the concept instead of making a theoretical argument. Second, this paper considers the contextual elements that can alter the primary relationship between engagement in the sharing economy and sustainable performance. Third, it is one of the few studies on the sharing economy and the third study that takes culture into account besides the American consumers. Fourth, it answers the question of previous research regarding familiarity and is the first study that investigates this relationship. Fifth, this study is one of the first to employ innovation as suggested by Habibi et al. (2016).

Due to the recent success of the sharing economy and its growing popularity, this study also includes managerial implications. First, this paper found that there is an increasing popularity in the sharing economy and its principles. Both the implications of consumers seeking cheaper alternatives and sustainable options might assist managers in understanding sharing economy participants. It suggests that sharing and sustainable consumption are objectives that are inseparable for these consumers and managers might initiate with sharing economy principles to become more sustainable. Second, this study has shown that a company does not necessarily need to be a non-profit company to be part of the sharing economy.

The remainder of this thesis is structured as follows. First, several essential concepts from the sharing economy are reviewed to provide a theoretical base and identify a research gap. Second, a conceptual model with associating hypotheses is introduced on how engagement in the sharing economy relates to sustainable performance. The third section includes the

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9 methodology which explains for which reason and how the data was collected. Fourth, the results of the analysis are presented and either support or reject the hypotheses. The fifth section discusses the findings and interprets the results related to academic and managerial implications as well as limitations and recommendations for future research. Finally, the last section forms a conclusion and highlights the main contributions of this study.

2. Literature Review

This section reviews the scholarly debate on the sharing economy, engagement in the sharing economy, sustainable performance and the issues surrounding it.

To identify all studies on the sharing economy, multiple databases were searched. To narrow the results, key publications were selected with titles, keywords and abstracts mentioning the “sharing economy”, “collaborative economy/consumption”, “peer to peer economy” and some typical sharing economy products and services, such as “Airbnb” and “Uber” (Cheng, 2016). In this paper, peer-reviewed journal articles are mainly used for the literature review since they are the primary way to strengthen the reliability of the results (Cheng, 2016). The sharing economy is a new study; hence it is vital for this paper to identify the key articles from an already narrow selection.

In a recent article, Acquier et al. (2017) suggest that the sharing economy is an umbrella construct. This is primarily because it is researched in many different fields, such as, anthropology (Belk, 2014b), consumer behaviour (Bardhi & Eckhardt, 2012; Habibi et al., 2016), geography (Richardson, 2015), innovation (Guttentag, 2015), law (M. Cohen & Sundararajan, 2015; Kassan & Orsi, 2012; Redfearn, 2016), management (B. Cohen & Kietzmann, 2014), marketing (Lamberton & Rose, 2012) and sociology (Schor, Fitzmaurice, Carfagna, & Attwood-Charles, 2016).

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10 To add even more confusion, authors have proposed many adjacent concepts which all indicate or describe the sharing economy in a manner. These are different definitions for the same concept. These concepts are access economy (Bardhi & Eckhardt, 2012), collaborative consumption (Botsman & Rogers, 2010), gig economy (Friedman, 2014; Sundararajan, 2013), gift economy (Acquier et al., 2017), peer-to-peer economy (Bauwens, 2006), platform capitalism and on-demand (Cockayne, 2016). Detailed research about the diverse terminologies in the different fields of research can be found in the works of Dredge & Gyimóthy (2015).

Table 1:

Examples of definitions of the sharing economy

Authors Definition

Acquier et al., 2017 "An umbrella construct consisting of three foundational cores: (1) Access economy, (2) Platform economy, and (3) Community based economy" (p.1).

Bardhi & Eckhardt, 2012

"access-based consumption: transactions that may be market mediated in which no transfer of ownership takes place. " (p.881).

Belk, 2014b Differentiates ‘true sharing’, ‘pseudo-sharing’ and 'collaborative consumption'. "Sharing is an alternative to the private ownership that is emphasized in both marketplace exchange and gift-giving" (p.1596).

"Pseudo-sharing is a phenomenon whereby commodity exchange and potential exploitation of consumer co-creators present themselves in the guise of sharing". (p.1597), or "business relationship masquerading as communal sharing" (p.1598). "Collaborative consumption is people coordinating the acquisition and distribution of a resource for a fee or other compensation" (p.1597).

Botsman & Rogers, 2010

"An economic model based on sharing underutilized assets from spaces to skills to stuff for monetary or non-monetary benefits" (p.2).

Cockayne, 2016 "The on-demand or ‘sharing’ economy is a term that describes digital platforms that connect consumers to a service or commodity through the use of a mobile

application or website" (p.73). Frenken & Schor,

2017

Define the sharing economy as "consumers granting each other temporary access to under-utilized physical assets ('idle capacity'), possibly for money" (p.4-5).

Habibi et al., 2016 "The sharing economy is an umbrella term for a wide range of nonownership forms of consumption activities such as swapping, bartering, trading, renting, sharing, and exchanging"(p.1)

Habibi et al., 2017 "We suggest a sharing-exchange continuum that helps distinguish the degree to which actual sharing is being offered" (p.115).

Martin, 2016 "The sharing economy is (a niche of innovation) decentralising and disrupting established socio-technical and economic structures (regimes)" (p.149) Oxford English

Dictionary, 2015

In the Sharing Economy 1) assets or services are shared between individuals for free or a fee, and 2) transactions are mediated through the internet.

Stephany, 2015 "The sharing economy is the value in taking underutilized assets and making them accessible online to a community, leading to a reduced need for ownership of those assets" (p. 9).

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11 As previously explained, authors have different definitions of what defines the sharing economy because they believe that the term inherits different concepts. Table 1 above shows examples of the key definitions of the sharing economy to give an overview of how some definitions are narrow or broad and include or exclude for-profit companies.

2.1. The Sharing Economy

To understand the literature on the Sharing economy, it is necessary to review the key literature on this phenomenon. The following section provides an overview of the different terms used to identify the sharing economy, the drivers of confusion and the key areas where the sharing economy is present.

Literature has pointed out that the most widely used terms to define the phenomenon are “sharing economy”, “collaborative consumption” and “peer to peer economy” (Cheng, 2016). Table 1 shows the different definitions of the sharing economy. The sharing economy presents the market with the opportunity to alter the view of what is happening, changing the companies’ business model designs and the day-to-day decision-making (Cheng, 2016). Companies such as Airbnb, relatively new players, have revolutionised the way this phenomenon is envisioned. In just a few years, Airbnb has outperformed the world leading traditional international hotel chains and is expanding seamlessly throughout the globe (Cheng, 2016).

Next to the fact that there is no precise definition of the sharing economy, authors are also in disagreement about how, when and why the sharing economy started. One viewpoint is that this phenomenon can be traced back to early 2000, where the sharing economy was a means to help non-profit organisations to fight the limitations of, for example, natural resources by linking together the online and offline world (Belk, 2014b). At this time, companies such as Couchsurfing and Freecycle were founded to link these two worlds. Eventually, the linkage

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12 grew into great business models by taking a fraction of the sharing fee, as Airbnb and Uber did (Belk, 2014b; Codagnone & Martens, 2016). Another viewpoint is that one of the first times that there was a record of the sharing economy by means of an economic transaction can be traced back to the maritime industry where the shipping companies decided to make their shipping containers available to other companies at the place of arrival. They requested a small fee, or occasionally no fee, from another company to use their shipping container and ship it back to the place of origin. As a result, the owner of the shipping container did not incur costs for bringing bring back an empty container, and the company that borrows the shipping container does not have to buy one themselves (Sanders, Riedl, Schlingmeier, & Roeloffs, 2016). One more possible beginning of the sharing economy can be traced back to the aftermath of the global financial crisis of 2008, where consumers tried to find new means to gain access to products and services aside from the concerns of ownership (Botsman & Rogers, 2010). In the viewpoint of Botsman & Rogers (2010), this is where the new economic model known as the sharing economy or collaborative consumption emerged with the main principles of integrating collaboration, technology and more efficient usage of products and services.

Interest in the sharing economy started to increase massively in 2011 and 2012 due to the success stories of Airbnb and Uber (Martin, 2016). Because the sharing economy is believed to include not only non-profit companies but also for-profit companies, scholars created different terms, based on their background, to capture the various meanings of the sharing economy. Examples of these terms are access-based consumption from Neo-classical microeconomics (Bardhi & Eckhardt, 2012) and moral economy from postmodern sociology (Germann Molz, 2013). For example, Stephany (2015) suggests that the sharing economy is organised by “the value of taking under-utilised assets and making them accessible online to a community, leading to a reduced need for ownership” (p. 205). However, Belk (2014) treats

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13 consumers as collaborators by highlighting that the sharing economy is “people coordinating the acquisition and distribution of a resource for a fee or other compensation” (p. 1597).

Subsequently, there is no definitive definition of the sharing economy. Likewise, researchers are not confident whether the phenomenon should be named the sharing economy because many authors used different terms to describe it. However, scholars, practitioners and policymakers believe that the sharing economy started to change many aspects of our current social and economic system by allowing individuals, communities, organizations and policymakers to rethink the way we live, grow, connect and sustain (Department for Business, Innovation and Skills, 2015; Schor & Fitzmaurice, 2015).

This paper will use the definition of this phenomenon presented in the Oxford English Dictionary (Oxford English Dictionary, 2015). The definition of the sharing economy in the Oxford Dictionary includes two important aspects on which the scholars combined agree with 1) assets or services are shared between individuals for free or a fee; and 2) transactions are mediated through the internet (Oxford English Dictionary, 2015; Parente et al., 2017).

2.2. The sharing economy and its cores

The next section will give a more transparent overview on what the sharing economy is, what lies at its cores and what kind of goods and services are part of the sharing economy.

Acquier et al. (2017) suggest that the sharing economy is an umbrella construct, because of the broad area covered in many different fields. As previously explained, these fields include anthropology (Belk, 2014b), consumer behaviour (Bardhi & Eckhardt, 2012; Habibi et al., 2016), geography (Richardson, 2015), innovation (Guttentag, 2015), law (M. Cohen & Sundararajan, 2015; Kassan & Orsi, 2012; Redfearn, 2016), management (B. Cohen & Kietzmann, 2014), marketing (Lamberton & Rose, 2012) and sociology (Schor et al., 2016). It is therefore not clear how to define the sharing economy (Arnould & Rose, 2016; Belk, 2010;

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14 Frenken & Schor, 2017), if scholars can agree on one definition, and whether current thriving business models live up to conceptual ideas of what sharing is (Belk, 2014b).

Acquier et al. (2017) position the sharing economy on three foundational cores: (1) Access economy, (2) Platform economy, and (3) Community-based economy.

2.2.1. Access Economy

The authors define the first core of the sharing economy as the access economy. The access economy involves sharing assets that are underutilised to use them most effectively and efficiently (Acquier et al., 2017). These can be either material resources or skills. The above-stated definition is one of the most widely accepted definitions to describe the sharing economy. Many of the definitions regarding what the sharing economy is are built upon the idea of optimising underutilised assets (Acquier et al., 2017). Instead of ownership, they promote access (Belk, 2014b, 2014a). Nonetheless, it can be argued that temporary access instead of ownership of a good is not something new. These access-based transactions have existed for a long time in for-profit and non-profit business models. Examples of for-profit business models are leasing or rental, and examples for non-profit models are borrowing books in public libraries (Bardhi & Eckhardt, 2012). However, now it seems that there is a global shift from capitalism towards post-ownership societies. Short-term use and experience are, in some ways, more important than long-term ownership of property (Acquier et al., 2017). One of the forms that the access economy takes is that companies are starting to offer more and more services instead of products. This process has been referred to as product service systems, servitisation, or functional business models (Mont, 2002). Botsman & Rogers (2010) show that products that are now shared instead of purchased include cars, houses, luxury clothes, and household appliances.

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15 The access economy covers a range of organisational and governance configurations that are recognised by authors to be part of the sharing economy. In some cases, such as Autolib and Zipcar, which are car-pooling systems, the organisation of access relies on the company owning and managing their assets. (Bardhi & Eckhardt, 2012; Lamberton & Rose, 2012). In other cases, access is within a network of peers where there is decentralised ownership of assets, like peer-to-peer car rental (Sundararajan, 2013). Furthermore, the access economy does not need to be either for-profit or non-profit. It can be either, and in addition to that, it can also be a public-private partnership or a cooperative model (Acquier et al., 2017).

The access economy offers several promises. On the economic and social side, it offers broader and cheaper services to customers in the short term. Also, customers do not need to acquire a good to gain ownership (Bardhi & Eckhardt, 2012). On the environmental side, it is promoted as a sustainable solution because sharing and mutualisation enable people to get more out of the product and use it more intensively (Firnkorn & Müller, 2011). Besides, because producers continue to be the owners of the assets, they are responsible for environmental externalities and have the motivation to design green and durable products (Braungart & Mcdonough, 2002). Nevertheless, the literature lacks empirical results on this matter. While authors theorise that the sharing economy could offer more sustainability, there is no empirical research done on this relationship.

Next to the potential of the access economy, it also has its challenges. The first challenge stems from the assumption that if one has ownership of a product, one will treat it more gently. Where the sharing economy is used to share products amongst members, the business models lack incentives to treat the products like they are one’s own (Bardhi & Eckhardt, 2012). According to Bardhi & Eckhardt (2012), this is why some users do not care about participating in sharing cars. For instance, the authors explain that when sharing a car, they lack the identification that usually comes with owning the car and that consumers, therefore, do not care

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16 for it as it were their own. Davidson et al. (2017) point out that this is due to a difference in culture. While collectivistic cultures might be accustomed to sharing and caring for the products of others, an individualistic culture values the status that comes with owning a product. It suggests that there is are differences in the degree of engagement with the sharing economy based on people’s culture. Furthermore, Tukker (2004) suggests that there is a tension between the economic and environmental objectives. The author shows that business models with a strong sustainability principle have high-risk premiums and liability risks. Including these risks are that if a company shares its goods among users, the owners must make high investments in enforcing efficient controls to monitor the way the users use the products (Tukker, 2004).

2.2.2. Platform Economy

The second core of the sharing economy is the platform economy. Acquier et al. (2017) define this as a set of initiatives that intermediate decentralised exchanges among peers through digital platforms. The sharing economy is frequently associated with peer-to-peer transaction platforms, a type of platform where individuals exchange goods and services (Weber, 2014). According to a survey by Evans & Gawer (2016), approximately 70 per cent of start-ups with a valuation higher than $1 Billion without going public (also called unicorns) are built on a platform model. Platform companies collectively summed up more than $4.3 Trillion in market capitalisation in 2016 (Evans & Gawer, 2016). These platforms create value by connecting and organising transactions rather than producing them. Examples from companies participating in the sharing economy on a peer-to-peer basis are Alibaba, Amazon and eBay.

The owners of these companies own the platform on which consumers buy and sell their products or services (Evans & Gawer, 2016), which contributes to the reason why these platforms are regarded as highly innovative since the individuals can implement it themselves (Gawer & Cusumano, 2014). People that are familiar with these platforms will return to use it (Amit & Zott, 2001). Furthermore, when one is satisfied with the usage of the platform, it

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17 creates trust and therefore increases the individuals’ likelihood of participation in these kinds of services or programs (Laroche, Habibi, & Richard, 2013).

The economic promises that platforms offer consist of new market developments based on extensive, secure, and decentralised access. Individuals that promote the platform economy will gain opportunities in these markets, either as consumers (giving cheaper and secure access) or as producers (creating entrepreneurial ventures). Platforms promote themselves as a mean to confront centralised institutions, such as large corporations, professions or the state (Acquier et al., 2017).

While platforms promote market disruption and increase competition, their scaling potential (backed up with massive venture capital funds), combined with strong network effects, tends to lead to new technological giants such as Airbnb, Uber and Blablacar. Critics also condemn platform economy companies that are promoting a paradoxical discourse. For some companies, the use of terms like “sharing” and “communities” is a disguise to hide pseudo-sharing practices (Belk, 2014a) and logic of neoliberal financialization (Martin, 2016).

2.2.3. Community-based economy

The third core of the sharing economy is the community-based economy. In this pillar, the sharing economy represents initiatives through contractual, hierarchical or non-monetized forms of interaction (to form exchange relationships, participate in a project or perform work). The primary purpose of the initiatives within the community-based economy is to contribute or participate in a community project, to make new social bonding’s and ties, to broaden one’s network, to promote values or to achieve a social task through a collective project. They promote this instead of creating and maximising economic value (Acquier et al., 2017). Traditionally, communities contain strong social ties among close members interacting at the same level. However, digital innovations create new projects. These projects are called

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18 “social sharing” and people from across communities, who are most of the time not actively connected, participate in these projects (Benkler, 2004). The community is therefore conceptualised as a system to organise and involve meaningful and useful relationships based on shared experience or interests.

Due to these digital innovations, the digital culture gave birth to new forms of collective sharing (both for production and distribution). This means that people from all over the world, who do not know each other, can work on the same project. This is called “open-source” (Acquier et al., 2017). Projects involving these new forms using open-source movement and associated projects are Linux and Wikipedia. These organisations seem to fit Belk's definition of “true sharing” (Belk, 2014a), as neither contributors nor users are expecting explicit or direct reciprocity for their actions (Benkler, 2004).

2.3. Participating Countries and Companies

The following section gives an indication about the countries and companies engaging in the sharing economy. Furthermore, this section notes some important sharing economy companies.

Many countries and companies are starting to associate themselves with the sharing economy. One of the main reasons for this is, as previously mentioned that the sharing economy is a fast-growing market. Many have heard about the success stories of the American companies Airbnb and Uber. However, recently the opportunities in China have become even more impressive since the Chinese government adopted the sharing economy into their nationality. Approximately 700 million smartphone users of which two-thirds regularly use Alipay and WeChat Pay are participating in China’s sharing economy, which was worth $520 billion in 2016 (Yan, 2017). The more essential sharing economies in China are Didi Chuxing (Chinese car sharing service) and Tujia (Chinese answer to Airbnb), which are two of the 12 current unicorns in China (companies valued over $1 billion or more) (Yan, 2017).

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19 Furthermore, Europe is also catching up and, as previously mentioned, it has the potential to grow their global revenues from approximately $15 billion now to $335 billion by 2025 (Lancefield et al., 2016). Some notable sharing economy companies from Europe include BlaBlaCar, Car2Go, Zipcar (car sharing services), JCDecaux (bike sharing service) and AXA (multinational financial-services company) as five out of the current 275 sharing economy companies (Lancefield et al., 2016). As previously mentioned, Davidson et al. (2017) illustrate that the different countries where sharing economy companies settle themselves might be subject to the culture using the sharing economy concepts. A study in Japan showed that only one per cent of the Japanese had used a sharing economy good or service (Romero, 2017).

Next to all the above, the BCG released their top 100 list of most innovating companies in 2018. This list contains 15-20 sharing economy companies including Airbnb, Alibaba, Amazon, AXA, Facebook, Netflix and Tencent (Ringel, Zablit, Grassl, Manly, & Möller, 2018). Form this it can be assumed that innovation drives deep in the heart of sharing economy companies and that it is interesting to research.

2.4. The success of the sharing economy

Research has shown that three main factors have helped with the ongoing success of the sharing economy. Firstly, more conservative and economic alternatives were sought by consumers owing to the global financial crisis of 2008. Secondly, finding these alternatives were made more accessible and efficiently owing to the development of internet technology and opportunities on social media. Lastly, consumers became more economically, environmentally and ethically aware of the efficient consumption platforms caused by consumers being more conscious about the depleting natural resources and turned away from over-indulgence and ownership (Bardhi & Eckhardt, 2012; Botsman & Rogers, 2010).

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2.5. The effect of Participation on Sustainable Performance

The previous section suggests that people are aware of their buying power and that it can affect sustainable performance while seeking cheaper and more sustainable options. This is also studied by Daunorienė, Drakšaitė, Snieška, & Valodkienė (2015). The authors explain that the sharing economy can contribute to the sustainable development. They believe that the sharing economy is the ideal way to explore and contribute to the sustainable development nature with a focus on sustainable use of resources (Daunorienė et al., 2015).

Furthermore, people are demanding increasingly complex, sustainable and integrated solutions instead of the standardised and homogeneous products and services. In addition to that, almost everyone is continuously connected to the internet via smartphones, there are numerous underused goods, and people are mindful of environmental sustainability. As a result, people are conscious of using platforms that give them access to, conveniently use and make a profit from underutilised assets. Bardi & Eckhardt (2012) and Lamberton & Rose (2012) confirm this by pointing out that among the factors that increase participation in the sharing economy are environmental and social concerns, flexibility, monetary motivations, and political motives. Furthermore, Eckhardt & Bardhi (2015) show that people do not only participate in the sharing economy to experience a new social group but mainly to avoid the liabilities that come with ownership and to take advantage of the lower costs.

Bardhi & Eckhardt (2012) theorise that individuals that participate in sharing based practices might have a firm interest in sustainable consumption (Habibi et al., 2017). Hamari, Sjöklint, & Ukkonen (2016) conclude the same in their study as it is one of the factors that drive people to participate in the sharing economy. Instead of buying and owning goods, consumers seek access to goods and prefer to compensate the owner for the experience of temporarily accessing these goods. Ownership is not the ultimate expression of consumer desire anymore

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21 (Bardhi & Eckhardt, 2012; Chen, 2009). Access to these models differs significantly. From car, bike or boat sharing programs (e.g. Zipcar, Uber, Hubway, Barqo) to borrowing DVDs online or other goods such as fashion, bags or even jewellery (e.g. Netflix, Rent the Runway, Bag Borrow or Steal, Borrowed Bing) (Bardhi & Eckhardt, 2012). Even borrowing books from a public library or using public transport is seen as part of the sharing economy (Botsman & Rogers, 2010). Social sharing is a phenomenon that includes cooperative enterprises where participants that are not connected can function as a sustainable and substantial alternative to economic production (Benkler, 2004). Heinrichs (2013) explains that it is a new pathway towards sustainability and Botsman & Rogers (2010) describe that it will disrupt the unstainable practices of hyper consumptions that drive the capitalist economies. In the case of the car sharing systems that the sharing economy offers, Firnkorn & Müller (2011) presented that CO2-emissions have reduced for the individuals making use of these services. Schor (2010) and Gansky (2011) predicted this and pointed out that the combination of economic rationality, cultural appeal and technological infrastructure would undoubtedly grow significantly over the next decade. The authors continue to explain that if this happens, the sharing economy has the potential to improve sustainability and decrease the carbon and ecological footprints in critical areas (Gansky, 2011; Schor, 2010). B. Cohen & Kietzmann (2014) also assume the relation mentioned above.

Moreover, research by Firnkorn & Müller (2011) suggests that the sharing economy is promoted as a sustainable solution because sharing and mutualisation enable people to get more out of the product and use it more intensively. Martin (2016) also point this out and continues by explaining in his research that there is considerable interest in the sharing economy because it promotes sustainable consumption. Albinsson & Perera (2012) believe that the individuals that are involved in the sharing economy are seeking more sustainable futures because they created communities on the level through the creation of alternative markets. Because of the

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22 growing interest in the sharing economy, the organisations get prompted to provide consumers with new sustainable products and services. It is up to them to not only analyse the customer needs, but also to find a way to receive value for these products and services (Hoskisson, Lau, Eden, & Wright, 2000; Peng, Wang, & Jiang, 2008; Wright, Filatotchev, Hoskisson, & Peng, 2005).

3. Conceptual Framework and Hypothesis

In this section, the hypotheses will be developed on how engagement in the sharing economy helps to increase sustainable performance, and how variables such as familiarity, culture and innovation moderate this relationship. The first part focusses on the clarification of the literature on the sharing economy. The second part focusses on the link between engagement in the sharing economy and sustainable performance. The third part focusses on the influence of the moderators on the relationship between engagement in the sharing economy. These parts accumulate in four hypotheses and the conceptual model which figure 1 below demonstrates.

Figure 1: Conceptual Model

A wide variety of studies have emerged since the increased popularity of sharing economy companies, such as Airbnb and Uber (Martin, 2016). In this paper, the concentration lies specifically on what the sharing economy is because there are many articles written about

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23 this specific phenomenon. Nonetheless, scholars do not seem to agree with the definition of the sharing economy (Acquier et al., 2017). One of the disagreements is the use of the term sharing economy when for-profit businesses are involved. A reason for this is because the for-profit businesses charge a fee for services or products offered. Thus, authors disagree that this is true sharing (Acquier et al., 2017; Bardhi & Eckhardt, 2012, 2015; Bauwens, 2006; Botsman & Rogers, 2010; Cockayne, 2016; M. Cohen & Sundararajan, 2015; Friedman, 2014). Furthermore, our review of the existant sharing economy literature prompts several questions that data research is uniquely suited to address. Furthermore, literature suggests that the sharing economy can help increase the sustainable performance. One example is that the individuals that understand their buying power can use it as a leverage on the company from which they buy their goods and therefore increase the sustainable performance.

The following section proposes a series of hypotheses regarding the role that engaging in the sharing economy can play to enhance sustainable performance.

3.1. Sharing Economy Engagement and Sustainable Performance

As already explained in the literature review and the previous section, it is important to note what the sharing economy is before this study can be carried out. Therefore, this study adopts the definition of the Oxford English Dictionary (2015) which states: 1) assets or services are shared between individuals for free or a fee, and 2) transactions are mediated through the internet. Acquier et al. (2017) and Habibi et al. (2017) also support this definition in their studies. The authors state that the sharing economy is an umbrella construct and that all those varieties together make up what is called the sharing economy.

In 2011, Time magazine recognised the sharing economy as one of the ten global world changers (Walsh, 2011). Even though this phenomenon was still in the early stages at that time, Schor (2010) and Gansky (2011) predicted that the combination of economic rationality,

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24 cultural appeal and technological infrastructure would undoubtedly grow significantly over the next decade. These authors continue to explain that if that happens, the sharing economy has the potential to improve sustainability and decrease the carbon and ecological footprints in crucial areas (Gansky, 2011; Schor, 2010). B. Cohen & Kietzmann (2014) also contrive this assumption. They assume that the sharing economy can potentially help to make a shift in global and local economies towards sustainability (B. Cohen & Kietzmann, 2014).

The existing literature seems to connect engagement in the sharing economy with sustainable performance, however, this is not validated. Bardhi & Eckhardt (2012) theorise that individuals that participate in sharing based practices might have a firm intention for sustainable consumption (Habibi et al., 2017). Hamari et al. (2016) include sustainability as one of the factors why people participate in the sharing economy. Instead of buying and owning products, consumers seek access to products and have a preference for compensating the owner for the experience of temporarily accessing them. Ownership is no longer the ultimate expression of consumer desire (Bardhi & Eckhardt, 2012; Chen, 2009). Access to these models differs substantially. From car, bike or boat sharing programs (e.g. Zipcar, Uber, Hubway, Barqo) to borrowing DVDs online or other goods such as fashion, bags or even jewellery (e.g. Netflix, Rent the Runway, Bag Borrow or Steal, Borrowed Bing) (Bardhi & Eckhardt, 2012). Even borrowing books from a public library or using public transport is seen as part of the sharing economy (Botsman & Rogers, 2010). Social sharing is a phenomenon that includes cooperative enterprises where participants that are not connected can function as a sustainable and substantial of economic production (Benkler, 2004).

As previously shown three main factors helped the sharing economy grow. Individuals searched for cheaper alternatives, these alternatives are more accessible due to the internet, and consumers are more aware of sustainable substitutes (Bardhi & Eckhardt, 2012; Botsman & Rogers, 2010). This suggests that people are aware of their buying power and that it can affect

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25 sustainable performance taking in mind that they go for cheaper and more sustainable options. The aforementioned is also studied by Daunorienė et al. (2015). These authors say that the sharing economy can contribute to the sustainable development. They believe that the sharing economy is the ideal way to explore and contribute to the sustainable development nature with a focus on sustainable use of resources (Daunorienė et al., 2015).

Furthermore, research by Firnkorn & Müller (2011) suggests that the sharing economy is promoted as a sustainable solution because sharing and mutualisation enable people to get more out of the product and use it more intensively. This is also pointed out in the study of Martin (2016), the author explains that there is considerable interest in the sharing economy because it promotes sustainable consumption. Heinrichs (2013) shows that it is a new pathway towards sustainability and Botsman & Rogers (2010) point out that it will disrupt the unstainable practices of hyper consumptions that drive the capitalist economies. In the case of the car sharing systems that the sharing economy offers, Firnkorn & Müller (2011) have shown that CO2-emissions have reduced for the individuals making use of these services. Albinsson & Perera (2012) believe that the individuals that are involved in the sharing economy are seeking more sustainable futures because they built communities through the creation of alternative markets. Because of the growing interest in the sharing economy, the organisations get prompted to provide consumers with new sustainable products and services. It is up to them to not only analyse the customer needs but also to find a way to receive value for these products and services (Hoskisson et al., 2000; Peng et al., 2008; Wright et al., 2005).

This thesis argues that engagement in the sharing economy increases a country’s sustainable performance. There is a link between engagement in the sharing economy and sustainable performance because of the above-stated arguments. When engagement is higher, more people participate with a particular product or service and will enable people to get more out of the product and use it more intensively. Increased engagement and therefore the growth

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26 of the sharing economy was influenced by the three previously named main factors by Bardhi & Eckhardt (2012) and Botsman & Rogers (2010). This suggests that people are aware of their buying power.

The sustainable performance of a country can be influenced by, for example, the carbon and ecological footprints and the individuals’ choice of products and services. Gansky (2011) and Schor (2010) explain that the sharing economy has the potential to improve sustainability and decrease the carbon and ecological footprints in crucial areas because of the sustainable options that the sharing economy offers. Because consumers choose these cheaper and more sustainable options (Hamari et al., 2016), the sustainable performance of a country will increase.

Therefore, it is theorised that the more people engage with the sharing economy, the higher the sustainable performance of a country will be. The same assumption is made by B. Cohen & Kietzmann (2014). These authors assume that the sharing economy can shift global and local economies towards sustainability (B. Cohen & Kietzmann, 2014) and Daunorienė et al. (2015) believe that the sharing economy is the ideal way to explore and contribute to the sustainable development nature. Lastly, Firnkorn & Müller (2011) suggest that the sharing economy is promoted as a sustainable solution because sharing and mutualisation enable people to get more out of the product and use it more intensively and as a result the sustainable performance of a country increases. However, the relationship between engagement in the sharing economy and sustainable performance is only theorised. Hence, the following hypothesis is stated:

Hypothesis 1: Engagement in the sharing economy is positively related to the sustainable performance of a country.

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3.2. Familiarity with the Sharing economy

In the previous hypothesis, it is argued that engagement in the sharing economy can positively influence the sustainable performance of a country. Here, this paper argues that familiarity can help to influence this relationship further.

Research shows that familiarity reduces the individuals’ uncertainty and this increases trust (Laroche et al., 2013). The studies of Richardson (2015) show that familiarity is essential in the cases of sharing economy products and services such as accommodation and housing. Ert, Fleischer, & Magen (2016) point out similar results in their studies where they conclude that pictures of the product or service offered on a platform could help consumers to feel more familiarity and trust. Furthermore, if consumers believe that sharing is a proper and stable substitute for owning, they are more willing to participate in various sharing programs (Habibi et al., 2016).

To find out whether familiarity helps e-businesses, Amit & Zott (2001) examined how companies created value in e-business and discovered that people familiar with a website or the concept of a website would return to use it. Brouthers, Geisser, & Rothlauf (2016) also state this and add that these businesses produce value through the creation and coordination of a network of users. The second part of the definition from the sharing economy as defined by the Oxford English Dictionary (2015) and used in this paper states that transactions are mediated through the internet. Therefore, this research is key to sharing economy platforms.

Empirical research that has been conducted on the access-based sharing or commercial sharing (Bardhi & Eckhardt, 2012; Lamberton & Rose, 2012) show that there are rather significant inconsistencies concerning the consumer participation in the sharing economy. The willingness of individuals to participate, based on anecdotal evidence, depends on the social aspects, the community and the environmental and moral concerns (Botsman & Rogers, 2010;

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28 Gansky, 2010; Richardson, 2015). However, empirical evidence demonstrates that there is little impact of these factors (Bardhi & Eckhardt, 2012; Lamberton & Rose, 2012). This suggests that there are many mixed opinions as to why people participate in the sharing economy.

The sharing economy is a relatively new concept, and since the success stories of Airbnb and Uber in 2011 and 2012, interest in the sharing economy increased (Martin, 2016). Habibi et al. (2016) theorise that familiarity is another factor that might affect the participation in the sharing economy. Research explains that familiarity with services such as Airbnb and Couchsurfing are significant. In general, knowledge of the services or programs creates trust and therefore increases the individuals’ likelihood of participation in these kinds of services or programs. However, research lacks evidence whether familiarity in the sharing economy will necessarily mean that those consumers do participate in the sharing economy or only do it once to try it out. Furthermore, it also lacks evidence whether participation also means that the sustainable performance will go up.

This thesis proposes that familiarity positively moderates the relationship between engagement in the sharing economy and the sustainable performance of a country. Stories of Airbnb and Uber in 2011 and 2012, tweaked interest in the sharing economy and individuals started to associate themselves with these services (Martin, 2016). Habibi et al. (2016) theorise that familiarity has a positive effect on participation in the sharing economy. Familiarity reduces the individuals’ uncertainty and results in increases trust (Laroche et al., 2013). When an individual trusts a particular good or service, the more likely they are to return (Amit & Zott, 2001). Therefore, it is assumed that familiarity increases participation.

The studies of Richardson (2015) show that familiarity is essential in sharing economy products and services such as accommodation and housing. Consequently, it can be assumed that familiarity has a positive effect on engagement. The participation of individuals rests on social aspects, the community and the environmental and moral concerns (Botsman & Rogers,

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29 2010; Gansky, 2010; Richardson, 2015). However, empirical evidence also records that these factors occasionally show little impact (Bardhi & Eckhardt, 2012; Lamberton & Rose, 2012). Hence, there are mixed opinions as to why people participate in the sharing economy. To test whether familiarity positively moderates the relationship between engagement in the sharing economy and sustainable performance, the following hypothesis is stated:

Hypothesis 2: Familiarity with the sharing economy positively moderates the relationship between engagement in the sharing economy and sustainable performance.

3.3. Culture

In an article from Time magazine published in January 2016, a poll was published to estimate the sharing economy in the U.S. It estimated that 42 per cent of Americans had already used the services and products that the sharing economy offers and that 22 per cent provided goods or services (Cusumano, 2017; Steinmetz, 2016). As opposed to this, only one per cent of the Japanese had used a sharing economy good or service (Romero, 2017).

Using the definition given by the Oxford English Dictionary (2015), Davidson et al. (2017) studied whether there is a difference in culture accepting the sharing economy in their country. Their study was based on the American and Indian culture, and they found significant differences between the two. The limited existing academic research on the sharing economy has only focused on the American consumers (Bardhi & Eckhardt, 2012; Chen, 2009; Davidson et al., 2017; Habibi et al., 2017; Lamberton & Rose, 2012). Because of this, it is interesting to discover whether the same moderator of culture influences the relationship between engagement in the sharing economy and sustainable performance in Europe. Furthermore, Richardson (2015) shows that different cultures can have a diverse way of handling the challenges and opportunities of the 21st_{century. The author explains that technology is always}

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30 (Richardson, 2015). Next to this, it also differs per culture whether they view the sharing economy as monolithically or pluralistically (Richardson, 2015). Schor & Fitzmaurice (2015) argue that ecological assets, information and social relations are at the core of the 21st_century

and that it is up to each different culture how to handle this. Schor et al. (2016) researched whether class and other forms of inequality play a role in the sharing economy. Fraisberger & Sundararajan (2015) suggest that the economic activity on these platforms can be a more significant benefit for the below median income consumers than the above median income consumers. This research takes a broad perspective and will examine an entire culture as a measurement for sustainable performance.

To calculate culture, this paper uses Hofstede’s cultural dimensions (Hofstede, 2011). The dimensions that previous research adapted were long-term orientation versus short-term normative orientation (LTO) and individualism versus collectivism (IDV) (Davidson et al., 2017). Hofstede explains LTO as every society keeps their past in mind as a means to handle the present and future challenges. Different cultures prioritise these goals in their manner. After a rigorous study, Hofstede investigated this relation on 103 different countries and their national culture and gave each a score between 0 and 100. Societies with a low score prefer to maintain an active link with the past and like to handle opportunities and challenges the old-fashioned way. They see change as suspicious. However, cultures with a high score encourage change as a means to be more modernised and prepare for the future (Hofstede, 2011). Martin (2016) defines it in terms of how easy it is for a culture to go from a culture where consumers own assets, to a culture where the consumers that share access to assets. The gap between different cultures is called cultural distance. Considering the LTO, the gap can be either low or high. A low cultural distance means that the aspect on the LTO is similar. A high cultural distance means that there are many different aspects. If there is a low cultural distance while the LTO is

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31 high, it is expected that this has a positive effect on the relationship between engagement in the sharing economy and sustainable performance.

Another way of calculating culture with regards to the sharing economy is individualism versus collectivism (IDV) (Davidson et al., 2017). A culture with a high score on this dimension, called Individualism, has a preference towards a loosely-knit social framework. In these cultures, individuals can be expected to take care only for themselves and their family. A low score on this dimension is called Collectivism. In cultures with a low score on IDV, the culture can be expected to have a tightly-knit social framework. In these cultures, individuals take care of their relatives and members of a particular group in exchange for unquestioning loyalty. Broadly this dimension reflects whether an individual identifies himself as an “I” or a “we” in the society (Hofstede, 2011). This dimension can be used in the relationship of engagement in the sharing economy because sharing is more common in a collectivist culture than an individualist culture. One of the reasons behind this is that collectivist natures have less access to resources. People in these cultures are more used to sharing to gain access or more efficient use of their scarce resources (Davidson et al., 2017).

This thesis proposes that the dimensions of long-term orientation and individualism of a country positively moderates the relationship between engagement in the sharing economy and the sustainable performance of a country. Different authors conducted empirical research and point out differences between cultures and whether they accept sharing economy practices. Davidson et al. (2017) found significant differences between the American and Indian culture. Furthermore, only one per cent of the Japanese used a sharing economy good or service (Romero, 2017). Cultures handle challenges and opportunities in a different way (Richardson, 2015). Because the dimension long-term orientation explains how cultures handle the present and future challenges (Hofstede, 2011), this can positively influence their engagement on the

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32 sharing economy. High scores mean that the culture is modernised and prepares for the future, and sustainable performance is a topic of the future.

Because research shows that collectivistic cultures have a higher tendency to participate with sharing economy practices (Davidson et al., 2017), Hofstede’s dimension of individualism is used to investigate whether some cultures might associate themselves sooner with the sharing economy. Low scores on this dimension explain that a culture is more collectivistic and are accustomed to sharing resources (Davidson et al., 2017; Hofstede, 2011). Accordingly, the following hypothesis is stated:

Hypothesis 3: The dimensions of long-term orientation and individualism of a country positively moderate the relationship between engagement in the sharing economy and sustainable performance.

3.4. Innovation

Innovation is another variable with which the sustainable performance of a country can be explained, and it can offer help in answering the research question. The sharing economy concept indulges organisations to find innovative solutions today to address the challenges of tomorrow (Daunorienė et al., 2015).

The article by Guttentag (2015), describes the disruptive innovation of sharing economy companies, such as Airbnb (Ert et al., 2016). Next to this, Habibi et al. (2016) explain that this disruptive innovation is present in the cases of the car-sharing services. Both of these assumptions are agreed upon by Martin (2016) as the author describes that the sharing economy is a disruptive business model driven by digital technologies. Schor & Fitzmaurice (2015) describe that the form that the sharing economy takes, which is a market of strangers instead of relatives and communities where goods and services are exchanged, is innovative. The sharing economy makes it possible to provide goods, services and opportunities in a new way, where

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33 they rely on peer-to-peer relationships instead of the traditional market actors to mediate the exchange between goods or services (Schor & Fitzmaurice, 2015). From this, it is assumed that innovation is present deeply ingrained in the roots of the sharing economy.

Cohen & Sundararajan (2015) theorise that the sharing economy brings a considerable amount of innovation with them. It especially promotes grassroot innovation which are community-led solutions for sustainability. Allowing society to tap into individual abilities and aspirations, with use of the sharing economy, that otherwise would have been left alone can have a tremendous potential towards sustainable performance (Cohen & Sundararajan, 2015). Research also suggests that the economic activity on these platforms can have a more significant benefit for the below median income consumers than the above median income consumers (Fraisberger & Sundararajan, 2015). From the above, it can be expected that the innovation that comes from the sharing economy can help to increase the sustainable performance.

Internet platforms, on their own, are seen as a means of innovation, because they form innovative processes through providing a technological platform on which other users can implement products or services (Gawer & Cusumano, 2014). However, this is not the case for every internet platform, but specifically to “innovation platforms”. As previously described the sharing economy has become a big tree with many branches and the internet platforms are one of the branches that want to be associated with the sharing economy, because of the positive symbolic value of sharing (Frenken & Schor, 2017). Via these internet platforms, the sharing economy promotes a more reasonable and sustainable distribution of resources. The sustainable distribution of resources is possible by reducing the costs of accessing products and services and consumer demand for these more reasonable and sustainable resources (Botsman & Rogers, 2010; Martin, 2016).

Literature suggests that a high level of innovation in a country has a positive impact on new technologies. A wide range of indicators can calculate the level of innovation of a country.

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34 Cornell University, INSEAD, & WIPO (World Intellectual Property Organisation), (2017) used 81 different indicators to explore a broad, innovative vision. This vision includes but not exceeds business sophistication, education, infrastructure and political environment. If there are many new technologies, new business models using sharing economy concepts might arise, and the level of sustainable performance may increase.

This thesis proposes that the level of innovation in a country positively moderates the relationship between engagement in the sharing economy and the sustainable performance of a country. Because high innovation drives companies to think of new ideas towards bringing products and services to the market, more options will appear for consumers. Disruptive innovation is seen in accommodation and car services (Ert et al., 2016; Guttentag, 2015; Habibi et al., 2016). One of the reasons for is this because the sharing economy is driven by digital technologies made possible by high innovation (Martin, 2016). Furthermore, because of a high level of innovation more innovative processes can be introduced. The internet platforms, which are made possible by innovation, develop innovative processes by providing technological platforms on which other users can implement products or services (Gawer & Cusumano, 2014). Via these internet platforms, a sustainable distribution of resources is promoted (Botsman & Rogers, 2010; Martin, 2016). This shows that a high level of innovation increases the sustainable performance of a country. Hence the following hypothesis is stated:

Hypothesis 4: The level of innovation in a country positively moderates the relationship between engagement in the sharing economy and sustainable performance