Externalization in the platform economy: Social platforms and institutions

Liang Chen (), Sali Li (), Jiang Wei () and Yang Yang ()
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Liang Chen: University of Melbourne
Sali Li: University of South Carolina
Jiang Wei: Zhejiang University
Yang Yang: Zhejiang University

Journal of International Business Studies, 2022, vol. 53, issue 8, No 11, 1805-1816

Abstract: Abstract The growing platform economy has revived the debate on the applicability of internalization theory in contemporary contexts. In moving this debate forward, we draw on insights from hybrids research and property rights theory to complement the internalization school. Our core contribution lies in a reconceptualization of platforms as a hybrid organizational form enabling the exchange of property rights between platform owners and complementors. Using social platforms as an example, we propose that improvement in a host country’s intellectual property protection will increase the multinational platform’s (MNP) level of internalization, and that the platform firm’s governance capabilities may weaken the effect of institutions on its operation mode. Our theoretical analysis yields new insights beyond the received view of internationalization that builds on the assumption of internalized proprietary resources. We conclude that internalization theory, as an overarching paradigm in IB, remains adaptable to new organizational forms in the digital economy.

Keywords: internalization theory; property rights; platforms; user-generated content; intellectual property; digital (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (16)

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DOI: 10.1057/s41267-022-00506-w

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