Efficacy of Networks in the Internationalization of ibusiness Firms

International business research has established that digital technology and networks influence the internationalization of firms. Recently, digital technology has led to the development of the ibusiness firm, which is a digital platform-based business model in which users co-create content through interactions among themselves to generate value for the firm (e.g., Facebook and Uber). Thus, success for an ibusiness firm in a country means increasing the network of users. Previous studies on ibusiness internationalization examined the role of media promotion and a country’s clout to increase the user base in a country. However, little is known regarding the efficacy of networks in the ibusiness firm’s internationalization process. Therefore, the aim of this research is to understand how networks – especially the users and partners – affect the internationalization of ibusiness firms and thereby contribute to the internationalization theory of these newgeneration firms. Drawing insights from the Uppsala model of internationalization and Social Exchange Theory, we use a multiple case study–based approach to interview senior management from 13 ibusiness firms. We then develop a new internationalization process model for ibusiness firms that highlights the importance of user networks (end customers and supplier partners) in selecting foreign locations to expand internationally, and accelerating the penetration of the foreign location by helping firms obtain a wider user base. We develop testable propositions and new theoretical insights to contribute to the internationalization theory. Further, we provide insights into how other networks, such as investor and personal networks, affect the international expansion journey of a firm. We identify that a firm deploys additional strategies, such as acquisition and digital and content marketing, to accelerate adoption in the foreign market. Thus, this study contributes to the ibusiness internationalization literature by extending the existing internationalization process theory to digital platform-based ibusiness firms.