Facebook as an intermediary in Emerging Markets

Abstract

Unlike developed markets, which are held together through a series of physical and institutional infrastructures that facilitate and foment economic operations, emerging markets as constituted by markets where buyers and sellers are not able to come together efficiently. (Khanna and Palepu, 2010) That is to say, where the institutions that facilitate economic activity, as well as the absence of an associated set of rewards and sanctions to enforce those rules, norms and belief systems are absent, resulting in institutional voids. Through a descriptive study, this thesis considers Facebook as an intermediary, the entity that inserts itself between sellers and buyers to abridge the gap created by institutional voids, limiting itself to small and medium businesses within the Argentine market. Through the analysis of the case study of En Orden (Argentine SMB), Facebook has shown to act as an intermediary through the company’s function as a credibility enhancer, a transaction facilitator and an adjudicator.