Unveiling the black box of platform internationalisation: analysing the impact of institutional factors and network effects strength on global supply in the platform economy
by Xiayu Wang; Alex Rialp-Criado
European J. of International Management (EJIM), Vol. 25, No. 3/4, 2025

Abstract: The emergence of digital platforms has revolutionised the landscape of firms' international expansion, posing challenges to traditional internationalisation theories. However, there remains a notable gap in international business literature within the context of platform economy. Focusing on the supply side, we explore the impact of formal and informal institutional factors in host markets on the supply of platform economy by analysing the listing of accommodations for two well-established short-term rental platforms, Airbnb and VRBO, in 246 cities across 37 countries. We find that platforms undergoing internationalisation grapple with the liability of foreignness due to strict regulations in host markets and cultural distance. However, the transferable strong network effects from the home market act as a catalyst in mitigating the liability of outsidership in foreign markets. Our research contributes as an interface between international business research and the platform phenomenon, offering vital insights for practitioners in navigating international market expansion.

Online publication date: Tue, 25-Feb-2025

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