Anywhere in the World? The Internationalization of Small Entrepreneurial Ventures using a Social Media Platform.

Date01 Agosto 2023
Authorda Fonseca, Luiza Neves Marques

1 Introduction

Digitalization has promoted radical changes in business operations, such as changes related to reducing intermediation, interacting with business partners, facilitating transactions, and promoting knowledge generation and dissemination (Stallkamp & Schotter, 2021; Thomas & Autio, 2020). In the global arena, digitalization has the potential to provide additional benefits, including identifying international business opportunities (Song & Wu, 2021), accelerating the speed and broadening the scope of internationalization (Dagnino & Resciniti, 2021; Herve et al., 2020), reducing distance (Bergamaschi et al., 2021) and decreasing or eliminating geographic barriers (Nambisan et al., 2019), and facilitating interactions with different business actors regardless of where in the world they are located (Dagnino & Resciniti, 2021; Herve et al., 2020; Li et al., 2022), while lowering the costs and perceived risks of doing business abroad (Nambisan et al., 2019). However, despite its potential to foster internationalization, the interplay between digitalization and internationalization is considered "a fairly new domain of study" (Bergamaschi et al., 2021, p. 1006), with few empirical studies having examined the phenomenon (Ojala et al., 2022).

Digital platform ecosystems (DPEs) play a critical role in today's new global business environment (Stallkamp & Schotter, 2021). Beyond the benefits provided by digitalization per se, DPEs enable non-contract coordination among business players (Thomas & Autio, 2020) in order to co-create value, thereby generating a multiplicity of network effects that include a diverse set of actors that are not constrained by industry or geography. Among this diverse set of actors, entrepreneurial firms are an interesting group due to their relevance as complementers, innovators, and sources of new ideas and business models, and given the fact that "entrepreneurship in an ecosystem may be different than in other contexts" (Zahra & Nambisan, 2011, p.5). Accordingly, Ojala et al.'s (2022) literature review calls for more studies that examine the role played by entrepreneurs in digital internationalization.

International Business (IB) research has been late in examining DPEs, considered to be a "critical gap" (Stallkamp & Schotter, 2018, p.3) that has "yet to be fully incorporated in the IB literature" (Li et al., 2019, p.1448). Even less attention has been paid to the impact of DPEs (Jean et al., 2020) and social media platforms in particular (Fraccastaro & Gabrielsson, 2018; Rialp-Criado et al., 2020) on firm internationalization. Lee et al. (2022, p. 1) pointed out that the digital internationalization of small firms using social media platforms "is acutely absent" from the extant literature, despite a few exceptions (Fraccastaro et al., 2021; Lee et al., 2022; Sigfusson & Chetty, 2013). In addition, the extant literature has mostly neglected the role of social media platforms in the internationalization of new ventures in emerging economies (Jean et al., 2020; Lee et al., 2022; Monaghan et al., 2022). However, there is no reason to assume that the digital internationalization of firms in advanced economies bears any similarity to the experience of firms in emerging economies. If emerging economy ventures use digital platforms to overcome "resource and capability constraints. typical of the business environments of their home countries" (Monaghan et al., 2020, p. 14), their use may differ from that of ventures operating in high-qualify institutional environments. Accordingly, issues related to institutional voids and cultural distance may play a more salient role in emerging economy firms than in their advanced-country counterparts, or the former may face different obstacles in the pursuit of international opportunities, thus impacting digital internationalization (Jean et al., 2020).

Therefore, the present study aims to contribute to answering the following question: How does the interplay between internationalization and digitalization using a social media platform evolve during the early international steps of new ventures from an emerging economy? To answer this question, the study adopts a qualitative approach based on a longitudinal, multiple-case study of new ventures from a Latin American emerging economy, Brazil.

This study offers the following contributions to the nascent literature on digital internationalization. First, we examine the interplay between digitalization and internationalization of small ventures, and how one phenomenon may influence the other, that is, how digitalization impacts internationalization, and whether more internationalization requires further digital transformation, as proposed by Dagnino and Resciniti (2021). Second, we specifically challenge the assumption that, because DPEs are not constrained by geography (De Reuver et al., 2018), non-location-bound benefits can be fully exploited even by very small firms in their early steps of internationalization. Third, we look at the use of a specific type of DPEs--social media platforms--in the process of the digital internationalization of small ventures, a topic that is barely addressed in the digital ecosystems or in the digital internationalization literatures (Alaimo et al., 2020; Lee et al., 2022; Rialp-Criado et al., 2020). Fourth, we examine the phenomenon from the perspective of the entrepreneurs who founded these new ventures, answering a call by scholars for more research on this type of firm (Ojala et al., 2022; Sussan & Acs, 2017). and in the context of an emerging economy (Jean et al., 2020). Fifth, we provide an in-depth view of how the process evolves over time. Longitudinal, qualitative studies on the interplay between digitalization and internationalization have been advocated in a recent literature review on digital internationalization (Bergamaschi et al., 2021).

2 Literature Review

2.1 Social Media as DPEs

Although the literature on ecosystems is not new (Adner, 2017), it has recently gained popularity with the rise of DPEs (Jacobides et al., 2018). A specific strand of the ecosystems literature deals with entrepreneurial ecosystems (Stam & Spigel, 2016), considering traditional forms of spatial agglomerations, such as clusters (Auerswald & Dani, 2017) and networks of relationships that are not location-bound (Alvedalen & Boschma, 2017). More recently, scholars have combined the literature on entrepreneurial ecosystems with the literature on DPEs (Sussan & Acs, 2017; Song, 2019). Social media platforms are one type of DPE (Alaimo et al., 2020). Originally operating predominantly as platforms for community building and networking, social media have evolved to become "platform organizations facilitating certain kinds of exchanges" characterized by a "complex arrangements of actors, technologies and practices" (Alaimo et al., 2020, p.27), with different actors often playing diverse roles (Stallkamp & Schotter. 2021).

Digital platforms have increasingly become global (Brouthers et al., 2016; Ojala et al., 2018). Although social media platforms must develop a sizable network of members in each country, they are not location-bound. Geographic boundaries are said not to even matter (De Reuver et al., 2018), either because interactions within the platform are digital only, or because they can be completed by means of physical transportation (Stallkamp & Schotter, 2021). However, both physical distance and social distance (localness) still impact user interactions (Li et al., 2019; Stallkamp & Schotter, 2021). Nevertheless, the globality of DPEs (and of social media platforms) has changed the logic of small firm internationalization (Zahra & Nambisan, 2011; Nambisan, 2017, p. 1029-1030) highlights two major changes in entrepreneurial activity due to digital platforms: (i) they make entrepreneurial outcomes and processes "less bounded" or subject to constant development and improvement; and (ii) they make the locus of entrepreneurial agency "less predefined," once entrepreneurial ideas and resources are part of a collective process involving different agents with varied goals and capabilities.

2.2 OPEs and International Entrepreneurship

DPEs have strongly impacted the "nature, ways, processes, structure, as well as the cost of doing business internationally" (Nambisan et al., 2019, p. 1465) by providing smaller firms with resources they would not have access to otherwise. Accordingly, studies on how small ventures internationalize usually stress the inherent scarcity of resources for such firms and how they overcome their disadvantages and go international (e.g., Gabrielson et al., 2022; Hewerdine et al., 2014; Hurmelinna-Laukkanen et al., 2020). DPEs and social media platforms can enable new ventures to access and any country in the world, revolutionizing some of the very basic ideas of internationalization. For instance, Pogrebnyakov (2017) equates the creation of a Facebook page in a foreign country to the opening of a physical subsidiary.

The most obvious of the resources offered by DPEs is access to networks of potential customers from various countries within a controlled environment with established rules and processes that guide interactions and transactions (Parker et al., 2016). However, social media platforms go beyond bilateral relations with customers, in that they offer the possibility of multi-lateral interaction among brands, digital influencers, suppliers, and customers in a process that generates brand awareness, engagement, and intention to purchase (Jimenez-Castillo & Sanchez-Fernandez, 2019). Another set of resources to which small firms have access through DPEs are knowledge-related (Glavas et al., 2019), including real-time information on competitive moves, industry trends, emerging consumer preferences, customer feedback, new business models and technological advances. Moreover, DPEs are an ongoing source of new ideas and opportunities, either by...

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