Title: Improving multilevel marketing firm performance through network externality and digital technology support

Authors: Thamrin Selamet; Tirta Nugraha Mursitama; Asnan Furinto; Pantri Heriyati

Addresses: Department of Management, Bina Nusantara University, Jakarta, Indonesia ' Department of International Relations, Bina Nusantara University, Jakarta, Indonesia ' Department of Management, Bina Nusantara University, Jakarta, Indonesia ' Department of Management, Bina Nusantara University, Jakarta, Indonesia

Abstract: Today's growth and development of digital technology have had an impact on a variety of businesses and industries. As a result, the multilevel marketing (MLM) industry must likewise embrace digital technologies. However, engaging MLM firms to utilise digital technology is a complex process. This study examines the relationship between network externality, digital adoption capability and MLM firm performance. This study uses a quantitative research method with a sample of 184 MLM companies in Indonesia. The data are taken by spreading the questionnaire. The findings revealed that the ability to adopt digital does not necessarily directly improve firm performance and instead must be mediated by network externality in terms of improving firm performance. Although turbulent technology has less influence on this industry, it should be considered during the strategy development process. This study found new empirical evidence that network externalities are an essential aspect of the MLM company's growth. The findings are projected to contribute to the network marketing business and management growth significantly.

Keywords: network marketing; multilevel marketing; MLM; network externality; digital adoption; technology turbulence.

DOI: 10.1504/IJIMA.2024.137922

International Journal of Internet Marketing and Advertising, 2024 Vol.20 No.2, pp.216 - 228

Received: 06 Oct 2022
Accepted: 01 Feb 2023
Published online: 10 Apr 2024 *

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