Liability of ecosystem integration and internationalisation of digital firms
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Authors
Rong, K
Kang, Z
Williamson, PJ
Publication Date
2022-12Journal Title
Journal of International Management
ISSN
1075-4253
Publisher
Elsevier
Volume
28
Issue
4
Number
100939
Pages
100939-100939
Type
Article
This Version
AM
Metadata
Show full item recordCitation
Rong, K., Kang, Z., & Williamson, P. (2022). Liability of ecosystem integration and internationalisation of digital firms. Journal of International Management, 28 (4. 100939), 100939-100939. https://doi.org/10.1016/j.intman.2022.100939
Abstract
The widespread emergence of digital firms has important implications for international business theory. In this paper, we argue that because of systematic cross-industry differences in the local ecosystems digital firms need to develop in foreign markets, they will face differential costs and challenges of what we term liability of ecosystem integration (LoEI). The nature of the LoEI differs from both traditional concepts of the liability of foreignness (LoF) and the liability of outsidership (LoO). Rather than reflecting the need to overcome economic or psychic distance by learning about the host country (as with LoF) or investing in relationship-specific knowledge (as with LoO), overcoming LoEI requires investments in catalysing the co-development of a local ecosystem involving users, complementors and institutional actors specific to each business. We show how the level of LoEI a firm faces depends on the characteristics of its industry and its business model along three dimensions: the level of integration with local users, complementors, and institutions. These characteristics impact both firm's success in internationalisation and the level of concentration in the global market.
Sponsorship
This work is supported by the National Natural Science Foundation of China (Grant no. 71872098; 71834006), Beijing Social Science Funds (Grant No. 21DTR051), Tsinghua Strategy for Heightening Arts, Humanities and Social Sciences: “Plateaus & Peaks” (P&P) (Grant no. 2021TSG07009), and Major Program of National Social Science Foundation (Grant No. 20&ZD075; No. 18ZDA149).
Embargo Lift Date
2024-03-08
Identifiers
External DOI: https://doi.org/10.1016/j.intman.2022.100939
This record's URL: https://www.repository.cam.ac.uk/handle/1810/334985
Rights
Attribution-NonCommercial-NoDerivatives 4.0 International
Licence URL: https://creativecommons.org/licenses/by-nc-nd/4.0/
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