18074: Home-Country Platform Ecosystem Spillover Into International Markets (session 25968)

This study examines whether and to what extent digital commerce platforms leverage and exploit the home-country ecosystem-specific advantages (ESA) to influence their overseas market performance. We combine insights from an ecosystem lens and cross-border network externality in understanding the home-country ESA, identifying and examining an “ecosystem spillover” that brings competition to the local rivals in the international market. By incorporating home-country ESA into consumer utility, we propose a mathematical model that characterizes the platform ecosystem’s global competition. The equilibrium results imply a U-shaped relationship between the home-country ESA and the platform’s overseas market performance. With numerical simulations, we further find both the location-boundedness of the complementors in terms of internalization logic and the cross-border institutional distance in terms of externalization logic exert moderating effects on the U-shaped relationship. Based on the data from Chinese digital commerce platforms, the findings drawn from the mathematical model are empirically tested. This study provides novel insights into traditional IB theories on firms’ international involvement by identifying the home ecosystem spillover effects in facilitating digital platforms’ overseas market performance. In addition, our research reveals that both internalization and externalization logics significantly moderate the spillover of digital commerce platforms’ home ESA into foreign markets, thereby enhancing their foreign market performance.

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