In this paper, we study the impact of increases in media coverage from two sources, newspapers and blogs, on firm founding rates in the context of technology-based entrepreneurship. Although increasing work in information systems (IS) has begun to investigate the effect of user-generated content on entrepreneurial behavior, limited attention has been devoted to how media affects firm founding or the boundary conditions of such an effect. Arguing for the direct effect of increased discourse in traditional and user-generated media in the information technology (IT) industry, results suggest that discourse in traditional media and blogs strongly influences IT firm founding rates. We further consider the differential impacts of media discourse on firm founding in different IT subsectors, over time, and in different locations. We test our hypotheses using entrepreneurial firm founding data from VentureXpert from 1998 to 2007, social media data from the three largest blogging platforms, and traditional media coverage from 11 major U.S. newspapers. Our work contributes to a better understanding of the concurrent effects of multiple forms of media on decision making and adds to the small but emerging literature addressing entrepreneurship-related research questions in IS.
Consumer-generated ratings typically share an objective of illuminating the quality of a product or service for other buyers. While ratings have become ubiquitous and influential on the Internet, surprisingly little empirical research has investigated how these online assessments reflect the opinion of the population at large, especially in the domain of professional services where quality is often opaque to consumers. Building on the word-of-mouth literature, we examine the relationship between online ratings and population perceptions of physician quality. Our study builds on prior work by leveraging a unique dataset which includes direct measures of both the offline population's perception of physician quality and consumer-generated online reviews. As a result, we are able to examine how online ratings reflect patients' opinions about physician quality. In sharp contrast to the widely voiced concerns by medical practitioners, we find that physicians who are rated lower in quality by the patient population are less likely to be rated online. Although ratings provided online are positively correlated with patient population opinions, the online ratings tend to be exaggerated at the upper end of the quality spectrum. This study is the first to provide empirical evidence of the relationship between online ratings and the underlying consumer-perceived quality, and extends prior research on online word-of-mouth to the domain of professional services.