Paccar Hall, Room 290

Seminar Speaker: Ling Xue
Affiliation: Georgia State University
Area: Information Systems

Name of Presentation: Third-Party Developers' Adoption of APIs and Their Continued New App Development in Software Platform: A Competing Risk Analysis

Abstract:
Providing application programming interfaces (APIs) is a key strategy for software platforms to encourage and facilitate third-party app development. However, so far there lacks empirical evidence on whether API adoption by developers eventually drives their continued development of new apps. In this study, we use the data about a major web browser and its third-party developers to directly test the impact of API adoption by developers on their continued new app development. A challenge in investigation is that third-party developers often need to weigh their different development options (updating existing apps, new app development in their existing app categories, and new app development in new app categories). Unlike the occurrences of app releases, developers' underlying processes of effort allocation are typically unobservable. To address this issue, we develop a joint frailty model and perform a competing risk analysis. We model developers' updates of existing apps as recurrent events, and different types of new app development as competing terminal events for development cycles. Our results show that the adoption of platform APIs makes developers more likely to develop new apps both in their existing app categories and in new categories. In contrast, the adoption of platform APIs with a high level of abstraction can make developers less likely to continue their app updates. High-level platform APIs also generate a weaker effect than low-level platform APIs in driving new app development. We also find that developer competition strengthens the positive impact of high-level platform APIs on new app development in new categories and weakens the positive impact of high-level platform APIs on new app development in existing categories.