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The Effect of Institutional Logics on Business Model Development in the Sharing Economy

The forces influencing business model development are widely discussed in the literature, but so far, the effects of macro-level forces such as institutional logics have received little attention. This study describes the effects of institutional logics in the context of business model development in the German carsharing industry. We longitudinally analyze a rich qualitative dataset from the start of professional carsharing in 1988 to 2015 to uncover the forces influencing the business models. We find that the two main business models — the free-floating model and the station-based model — have developed along disparate trajectories because the actors in the market are committed to different institutional logics. Corporate-backed companies that operate the free-floating business model are committed to corporation logic, and the small, environmentally minded organizations that operate in a station-based model are committed to community logic. We contribute to the business model literature by presenting institutional logics as a moderating force that empower some development trajectories and inhibit others. We also argue that commitment to community logic concerns actors in many other sharing economy markets outside of German carsharing. We discuss the implications of this proposition and suggest topics for further research.

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