# Impact of online negative and positive reviews on app innovation

## TL;DR

This study finds that negative online reviews have a stronger positive impact on app innovation than positive reviews, with factors like app performance and history influencing this effect.

## Contribution

The paper introduces a novel empirical analysis of how negative and positive reviews differently influence app innovation, using signaling theory and negative bias.

## Key findings

- Negative reviews have a more positive influence on app innovation than positive reviews.
- App performance weakens the effect of negative reviews more than positive ones.
- App history and platform owner’s entry moderate the impact of negative reviews positively.

## Abstract

Past studies have suggested that online reviews positively impact app innovation. However, extant research has not yet explored the distinct impacts of online negative and positive reviews on app innovation. Based on signaling theory and negative bias, this study empirically examines the effects of online negative reviews versus online positive reviews on app innovation by using panel data from the iOS App Store in China. The findings demonstrate that online negative reviews have a more positive influence on app innovation than online positive reviews. Additionally, compared with online positive reviews, app performance more effectively weakens the promoting effect of online negative reviews on app innovation. Moreover, both app history and platform owner’s entry play a positive moderating role in the impact of online negative reviews on app innovation, while no positive moderating effect is observed in the impact of online positive reviews on app innovation. These results demonstrate the different effects of online negative reviews and online positive reviews on app innovation, expand the contingent value of online reviews and app innovation.