The emergence of multi-sided platform MNEs: Internalization theory and networks

Jing Zeng*, Zaheer Khan, Muthu De Silva

*Corresponding author for this work

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

The rise of the digital economy provides firms across the globe with unique business opportunities. Companies such as Facebook, Alibaba, and Uber are competing in a new multi-sided platform world; the primary focus of these firms, from their inception, is to provide digital infrastructure, information and technology—intangible assets that enable direct interaction or value creation across platforms by linking different user group and complementors, often at the international level. Building on data drawn from multinational multisided Platform corporations (MMPCs) operating in China, we combine insights from internalization theory and network effects in understanding the value creation of such firms. We explore the boundaries of these new “breed” of MNEs in exploiting firm-specific advantages (FSAs) and in creating new knowledge between headquarters and subsidiaries. The findings suggest that internalization theory needs to shift its focus from the ‘boundaries of the firm’ to the ‘boundaries of the local network’. By integrating their internal and external networks of knowledge in adapting their business models in host markets, this new breed of MNEs is more likely than the traditional one to gain a sustainable competitive advantage in the new information age.

Original languageEnglish
Article number101598
Number of pages14
JournalInternational Business Review
Volume28
Issue number6
Early online date1 Aug 2019
DOIs
Publication statusPublished - Dec 2019

Keywords

  • Digitization
  • Emerging markets
  • Firm-specific advantage
  • Internalization theory
  • Location
  • Multi-sided platform MNEs
  • Networks

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