Live-streaming shopping is burgeoning around the globe and a trillion-yuan market in China. This paper examines the impact of live streaming on stores’ performance and decomposes it into direct and indirect effects. Based on a unique dataset including information about 6,074 stores and complete streaming records of related influencers, we employ a two-way fixed-effects regression model with propensity score matching to evaluate the impact of staggered adoptions of live streaming. Results show that live streaming can significantly increase revenue and unit sales of adopters, which are validated by a latest heterogeneity-robust estimator and a causal forest method. The key factor that determines the impact of live streaming is whether an influencer’s category experience matches with a store’s product portfolio. Despite that industry stakeholders typically focus on the direct effect of living streaming, i.e., sales of items being live streamed, surprisingly our results indicate that its indirect effects are actually more important, through sales of streamed items after the live session and sales of other items related to the streamed items. In addition, our heterogeneity analyses reveal stronger direct effects on hedonic products than on utilitarian products. Compared with inexpensive products, direct effects are weaker but indirect effects are stronger for expensive products.
