Date of Award

Spring 2019

Document Type

Open Access Dissertation

Department

Moore School of Business

First Advisor

Sali Li

Abstract

This dissertation builds on the eclectic paradigm to explore internationalization strategies in the burgeoning digital economy through a rigorous empirical analysis of a unique big data archive tracking international penetrations of more than 1.5 million mobile apps across 58 countries. While traditional firms internationalize by internalizing physical assets to reap location advantages from foreign markets, many digital businesses internationalize by orchestrating networks of information flows across borders. Such digital internationalization may not be constrained by cross-national distance or lack of resources as digital businesses leverage globally disperse knowledge and innovation networks to develop scale free digital innovations and seamlessly transmit them across the world via global platforms. Incorporating such unique dynamics of digital internationalization in extant literature, I extend beyond the current research focus on firm resources and internalization of physical assets to evaluate how digital businesses internalize networks across multiple locations to virtually internationalize their scale free digital innovations. First, I argue that despite lower barriers to foreign market entries in digital world, digital internationalization is still subject to user adoption barriers that emanate from differences in user preferences. However, digital businesses may overcome user adoption barriers despite their limited resources by internalizing demand-side networks, particularly users, across countries. Next, I distinguish demand-side networks based on their potential of contributing knowledge and innovation ideas to facilitate the

internationalization of their digital innovations. I draw attention to the critical role of lead markets in a digital context by showing that establishing demand-side networks in lead markets can facilitate digital businesses in upgrading their innovations to penetrate multiple countries. Hence, I advocate expanding eclectic paradigm to incorporate demand-side networks in lead markets as important location advantages. Finally, as location of networks plays a pivotal role in setting the course of digital internationalization, I emphasize the need for categorizing countries across the world based on their network characteristics. I develop two indices, virtual distance and virtual clout, which measure how networks across countries differ from and connect with each other in the virtual world. My dissertation takes an initial but important step toward developing a more rigorous, quantifiable, and generalizable understanding of the new rules of digital internationalization by not only proposing important theoretical extensions but also subjecting them to sophisticated empirical investigations.

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