Digital Platform M&A Strategy in Two-Sided Markets: A Data-Driven Approach Using Fuzzy-Set Qualitative Comparative Analysis

Sihao Xing (), Wanyu Luo () and Weibin Deng ()
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Sihao Xing: Chongqing University of Posts and Telecommunications, Network Society Development Issue Research Center
Wanyu Luo: Chongqing University of Posts and Telecommunications, Network Society Development Issue Research Center
Weibin Deng: Chongqing University of Posts and Telecommunications, Network Society Development Issue Research Center

A chapter in Proceedings of the 2025 3rd International Conference on Digital Economy and Management Science (CDEMS 2025), 2025, pp 116-122 from Springer

Abstract: Abstract Digital platforms play a crucial role in the digital economy, with mergers and acquisitions (M&As) becoming more frequent and showing distinct characteristics compared to traditional markets. We examine 190 M&A cases involving Chinese digital platforms from 2003 to 2024, with a particular focus on how startup acquisitions contribute to the growth of these platforms. The findings show that Chinese platforms are generally younger and tend to engage in larger M&As. Using fuzzy-set qualitative comparative analysis (fsQCA), the study identifies seven distinct types of M&As. The empirical results indicate that during the growth phase M&As primarily target user resources and data to enhance network effects and algorithms. In the maturity phase, M&As focus on ecosystem development, integrating upstream and downstream operations. Startup acquisitions are mainly aimed at technological integration, market expansion, or rapid acquisition of user data from emerging markets to establish competitive barriers. Startup acquisitions often lead to the integration of startup products into dominant platform ecosystems.

Keywords: Digital platform; M&As; Startup (search for similar items in EconPapers)
Date: 2025
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DOI: 10.2991/978-94-6463-770-0_15

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