eprintid: 10195583 rev_number: 7 eprint_status: archive userid: 699 dir: disk0/10/19/55/83 datestamp: 2024-08-09 08:44:12 lastmod: 2024-08-09 08:44:12 status_changed: 2024-08-09 08:44:12 type: article metadata_visibility: show sword_depositor: 699 creators_name: Sands, Daniel B title: Double‐edged stars: Michelin stars, reactivity, and restaurant exits in New York City ispublished: inpress divisions: UCL divisions: B04 divisions: F49 keywords: evaluations, ratings and rankings, reactivity, restaurant industry, status, third parties, value creation and capture note: © 2024 The Author(s). Strategic Management Journal published by John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/). abstract: RESEARCH SUMMARY: This article develops a theoretical framework to explicate how third parties, who are not transactionally involved in a given exchange relationship, can promote or impede the creation and capture of value by influencing market actor beliefs and behaviors. I investigate these issues empirically through an abductive mixed‐method case study of the Michelin Guide's entry into New York City. An examination of two decades of the openings and closings of New York City's elite restaurants indicates that receiving a Michelin star corresponded to an increased likelihood of restaurant exit. Michelin stars appear to have fostered disruptions at recipients' upstream and downstream interfaces, which inhibited their ability to capture value. This ultimately underscores how value network reactivity to third‐party evaluations may lead to unintended consequences for firms: MANAGERIAL SUMMARY: This article explains how third‐party evaluators' reviews, ratings, and rankings can promote or impede the creation and capture of value. This occurs because third‐party evaluations engender reactions by those being evaluated, as well as reactions by other market actors such as competitors and exchange partners. I study these issues within the context of the Michelin Guide's entry into New York City, and my findings indicate that restaurants that received a Michelin star were more likely to close in subsequent years. Evidence suggests that intensified bargaining problems with landlords, suppliers, and employees, along with heightened consumer expectations, created new challenges for these Michelin‐starred restaurants, which ultimately made it more difficult for them to stay in business. date: 2024-08-06 date_type: published publisher: Wiley official_url: http://dx.doi.org/10.1002/smj.3651 oa_status: green full_text_type: pub language: eng primo: open primo_central: open_green verified: verified_manual elements_id: 2303392 doi: 10.1002/smj.3651 lyricists_name: Sands, Daniel lyricists_id: DBSAN98 actors_name: Sands, Daniel actors_id: DBSAN98 actors_role: owner full_text_status: public publication: Strategic Management Journal citation: Sands, Daniel B; (2024) Double‐edged stars: Michelin stars, reactivity, and restaurant exits in New York City. Strategic Management Journal 10.1002/smj.3651 <https://doi.org/10.1002/smj.3651>. (In press). Green open access document_url: https://discovery.ucl.ac.uk/id/eprint/10195583/1/Sands%20SMJ%202024%20Michelin%20stars%20reactivity%20and%20restaurant%20exits.pdf