Too big, too fast, too dangerous: dynamics of digital platform firm internationalization and government policy development

This chapter explores the intricate dynamics of digital platform firms' internationalization and the evolving governmental policies that shape their operational landscapes. Central to this discussion is the unique position of digital platforms, characterized as too big, too fast, and potentially too dangerous, navigating through heterogeneous and continuously changing political and social contexts. Employing institutional theory, the chapter delves into how digital platforms face and adapt to formal and informal institutions, highlighting the intensified challenges posed by their rapid expansion and dominant market strategies. The focus is on the dual imperative of achieving external and internal legitimacy, which is essential for maintaining competitive positions and ensuring stable resource exchanges across borders. The narrative underscores the significance of non-market strategies in overcoming regulatory hurdles and societal resistance, particularly for platforms facilitating location-bound transactions. It discusses how these platforms cultivate dependency relationships with governments and stakeholders to navigate the regulatory landscapes of host countries. Furthermore, the chapter presents a sequencing logic for digital platform expansion, arguing that entering markets with incomplete institutions allows platforms to leverage home country knowledge and drive institutional transformations, thereby gaining external legitimacy. This approach facilitates smoother entry into highly institutionalized markets, suggesting that successful internationalization not only depends on market strategies but also on adept management of political and social forces. Through this comprehensive analysis, the chapter contributes to a more profound understanding of the complexities digital platform firms face in their internationalization efforts and the critical role of governmental policy in shaping their success.