Internationalization of digital and traditional MNEs: A stylized comparison of antecedents, processes, strategies, and consequences

Florian A. A. Becker-Ritterspach

No 4, BPS Working Paper Series from Berlin School of Economics and Law (HWR Berlin), Berlin Professional School (BPS)

Abstract: This paper provides a stylized comparison of digital and traditional multinational enterprises (MNEs), examining how they differ in the antecedents, processes, strategies, and consequences of internationalization. Traditional MNEs expand gradually through tangible investments, foreign direct investment, and location-bound advantages. Digital MNEs, in contrast, rely on asset-light, platform-based models that allow for near-instant global reach, reshaping established patterns of international business. The comparison highlights that digital firms face reduced liabilities of foreignness but heightened liabilities of outsidership, shifting the internationalization logic from internalization toward externalization and ecosystem orchestration. While digital internationalization offers efficiency, scalability, and innovation, it also generates new risks, including regulatory challenges, dependency on external ecosystems, and environmental implications. By juxtaposing these "ideal types," the paper demonstrates both the continuities and discontinuities between digital and traditional internationalization paths. It questions the explanatory power of established IB frameworks and points to the relevance of emerging concepts such as ecosystem-specific and externalization advantages for understanding the evolving nature of global business in the digital age.

Date: 2025
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