Finance

Psychoanalysis

Internalization

Business

Cell

International trade

Psychology

Multinational corporation

Economics

Political science

Management

International business

Externalization

Intellectual property

Corporate governance

Industrial organization

Genetics

Economic system

Internalization theory

Biology

Internationalization

Journal of International Business Studies

The growing platform economy has revived the debate on the applicability of internalization theory in contemporary contexts. In moving this debate forward, we draw on insights from hybrids research and property rights theory to complement the internalization school. Our core contribution lies in a reconceptualization of platforms as a hybrid organizational form enabling the exchange of property rights between platform owners and complementors. Using social platforms as an example, we propose that improvement in a host country’s intellectual property protection will increase the multinational platform’s (MNP) level of internalization, and that the platform firm’s governance capabilities may weaken the effect of institutions on its operation mode. Our theoretical analysis yields new insights beyond the received view of internationalization that builds on the assumption of internalized proprietary resources. We conclude that internalization theory, as an overarching paradigm in IB, remains adaptable to new organizational forms in the digital economy.

Externalization in the platform economy: Social platforms and institutions