On the brink: Predicting business failure with mobile location-based checkins

Mobile-enabled location-based services are generating a huge amount of customer checkin data every day. It is vital to understand how small businesses, like restaurants, use this real-time data to make better-informed business operation decisions in this mobile marketing era. Using data collected from Foursquare, a leading location-based service provider, and Yelp, we aim to find out the predictive power of customer checkins on business failure of restaurants in New York City by using several predictive modeling techniques, such as Neural Network, Logit model and K-nearest neighbor. Our findings are encouraging. The customer checkin data from both a focal restaurant and its neighbors have shown strong predictive power on business failure. Compared to the baseline model in which we only use business characteristic variables to predict failure, incorporating the checkin data captured from location-based services gives a remarkable improvement on predictive accuracy. Our findings provide the foundation for future studies on the predictive power of information obtained from location-based services on business operations.

© This manuscript version is made available under the CC-BY-NC-ND 4.0 license https://creativecommons.org/licenses/by-nc-nd/4.0/

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Work Title On the brink: Predicting business failure with mobile location-based checkins
Access
Open Access
Creators
  1. Lei Wang
  2. Ram Gopal
  3. Ramesh Shankar
  4. Joseph Pancras
Keyword
  1. Location-based services
  2. Predictive modeling
  3. Logit model
  4. Neural network
  5. K-nearest neighbor
License CC BY-NC-ND 4.0 (Attribution-NonCommercial-NoDerivatives)
Work Type Article
Publisher
  1. Decision Support Systems
Publication Date July 12, 2015
Publisher Identifier (DOI)
  1. https://doi.org/10.1016/j.dss.2015.04.010
Deposited November 13, 2023

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Version 1
published

  • Created
  • Added LeiWang_DSS2015_On_the_Brink_Predicting_Business_Failure-1.pdf
  • Added Creator Lei Wang
  • Added Creator Ram Gopal
  • Added Creator Ramesh Shankar
  • Added Creator Joseph Pancras
  • Published
  • Updated

Version 2
published

  • Created
  • Deleted LeiWang_DSS2015_On_the_Brink_Predicting_Business_Failure-1.pdf
  • Added LeiWang_DSS2015_Predicting Business Failure.pdf
  • Updated
  • Published
  • Updated Keyword, Publication Date Show Changes
    Keyword
    • Location-based services, Predictive modeling, Logit model, Neural network, K-nearest neighbor
    Publication Date
    • 2015-08-14
    • 2015-07-12
  • Updated