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The international penetration of ibusiness firms: Network effects, liabilities of outsidership and country clout

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Abstract

The burgeoning of ibusiness firms in the modern digital economy challenges the received internationalization theory. Given that ibusinesses such as social networking sites create value by providing a digital platform for users to interact with one another, we employ a user-network perspective and externalization logic, suggesting that ibusinesses’ internationalization process depends critically on users’ collective interactions, instead of being solely driven by firms’ market commitments, as noted by the Uppsala model. However, ibusinesses may suffer from liabilities of outsidership due to the boundedness of international network effects. Drawing on social network theory, we demonstrate that such liabilities can be mitigated by first diffusing the ibusiness platform in countries with higher clout. Our analysis using a unique dataset of mobile ibusiness platforms finds empirical support for the hypotheses. We discuss theoretical implications for the network approach of the Uppsala model in the digital era.

Résumé

L’essor des firmes d’e-commerce dans l’économie numérique moderne remet en cause la théorie existante de l’internationalisation. Étant donné que les e-entreprises telles que les sites de réseaux sociaux créent de la valeur en offrant une plateforme numérique aux utilisateurs pour interagir, nous adoptons une perspective de réseau d’utilisateurs et une logique d’externalisation, suggérant que le processus d’internationalisation des e-entreprises dépend essentiellement des interactions collectives des utilisateurs, plutôt que d’être uniquement dicté par les engagements pris par les entreprises sur le marché, comme le montre le modèle d’Uppsala. Cependant, les e-entreprises peuvent souffrir des contraintes liées à la non-appartenance à des réseaux en raison de la limitation des effets de réseaux internationaux. En nous appuyant sur la théorie des réseaux sociaux, nous démontrons que ces contraintes peuvent être atténuées en diffusant d’abord la plateforme d’e-commerce dans les pays à plus forte influence. Notre analyse, fondée sur une base de données unique de plateformes mobiles d’e-commerce, trouve un soutien empirique pour les hypothèses émises. Nous discutons des implications théoriques pour l’approche réseau du modèle d’Uppsala à l’ère numérique.

Resumen

El surgimiento de las empresas de negocios de base en internet (ibusiness) de la economía digital moderna desafía la teoría de la internacionalización conocida. Debido a que los ibusinesses como los sitios de redes sociales crean valor al proporcionar una plataforma digital para que los usuarios interactúen entre sí, empleamos una perspectiva de red de usuario y lógica de externalización, sugiriendo que el proceso de internacionalización de los ibusinesses depende de manera crítica de las interacciones colectivas de los usuarios, en lugar de ser únicamente impulsados por los compromisos con el mercado de las empresas como lo señala el modelo de Uppsala. Sin embargo, los ibusinesses pueden sufrir de desventajas de aislamiento debido a los limites de los efectos de la red internacional. Basándonos en la teoría de redes sociales, demostramos que tales desventajas se pueden mitigar difuminando primero la plataforma de ibusiness en países con mayor influencia. Nuestro análisis utilizando un único conjunto de datos de plataformas de ibusiness móviles encuentra apoyo empírico para las hipótesis. Discutimos las implicaciones teóricas para el enfoque de red del modelo de Uppsala en la era digital.

Resumo

O surgimento de empresas baseadas na internet na economia digital moderna desafia a teoria da internacionalização conhecida. Dado que empresas baseadas na internet como sítios de redes sociais criam valor ao fornecer uma plataforma digital para usuários interagirem uns com os outros, nós empregamos uma perspectiva usuário-rede e lógica de externalização, sugerindo que o processo de internacionalização de empresas baseadas na internet depende criticamente das interações coletivas dos usuários, em vez de ser apenas impulsionado pelos compromissos de mercado das empresas, como observado pelo modelo Uppsala. No entanto, as empresas baseadas na internet podem sofrer desvantagens por ser de fora devido à limitação dos efeitos de rede internacional. Baseando-se na teoria de redes sociais, demonstramos que tais desvantagens podem ser reduzidas se a plataforma de negócios baseados na internet for primeiro difundida em países com maior influência. Nossa análise usando um conjunto de dados único de plataformas móveis de negócios eletrônicos encontra suporte empírico para as hipóteses. Discutimos implicações teóricas para a abordagem de rede do modelo de Uppsala na era digital.

摘要

现代数字经济中的网络业务企业的蓬勃发展挑战已被接受的国际化理论。鉴于像社交网站那样的网络业务通过提供数字平台让用户互动而创造价值, 我们采用用户网络视角和外部化逻辑, 指出网络业务的国际化进程关键取决于用户的集体互动, 而不是像乌普萨拉模型所指出的那样完全由公司的市场承诺驱动。然而, 由于国际网络效应的限制,网络业务可能会遭遇外来者劣势。借鉴社会网络理论, 我们展示这样的劣势能通过首先在具有较高影响力的国家扩散网络业务平台来减轻。我们使用移动网络业务平台的独特数据集进行分析, 找到了对假设的实证支持。我们讨论了在数字时代乌普萨拉模型网络法的理论启示。.

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Acknowledgements

We thank JIBS editor Peter Liesch and two anonymous reviewers for valuable guidance. We also appreciate the helpful suggestions received from session participants of the Academy of International Business. The names of the authors are given randomly and all contributed equally to the paper. This research is partly funded by grants from the CIBER University of South Carolina and the National Natural Science Foundation of China (Grant No. 71373010, 71873136, and 71732008).

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Authors and Affiliations

  1. Department of Management and Marketing, University of Melbourne, Melbourne, 3010, Australia

    Liang Chen

  2. International Business Department, Darla Moore School of Business, University of South Carolina, Columbia, SC, 29208, USA

    Noman Shaheer & Sali Li

  3. Renmin Business School, Renmin University of China, Beijing, 100872, People’s Republic of China

    Jingtao Yi

Authors
  1. Liang Chen
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  2. Noman Shaheer
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  3. Jingtao Yi
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  4. Sali Li
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Corresponding author

Correspondence to Jingtao Yi.

Additional information

Accepted by Peter Liesch, Area Editor, 30 July 2018. This article has been with the authors for three revisions.

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Chen, L., Shaheer, N., Yi, J. et al. The international penetration of ibusiness firms: Network effects, liabilities of outsidership and country clout. J Int Bus Stud 50, 172–192 (2019). https://doi.org/10.1057/s41267-018-0176-2

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