Int. Journal of Business Science and Applied Management, Volume 19, Issue 2, 2024

Mediating the Paradoxes of (De-)Internationalization

through Digital Platforms

Christian Festing*

Faculty of Engineering, University of Duisburg-Essen

Duisburg, Germany

Email: christian.festing@uni-due.de

Heike Proff

Faculty of Engineering, University of Duisburg-Essen

Duisburg, Germany

Email: heike.proff@uni-due.de

Abstract

Due to risks in the supply chain and the need for sustainability, among other things, concepts of de-

internationalization are increasingly being considered, while at the same time the potential of growing

markets motivates MNEs to continue investing in international operations despite the often large

distances involved. This can lead to paradoxical tensions in companies between motives for scaling

back and expanding the international footprint, particularly in the capital-intensive automotive industry.

To mediate these tensions in the sense of paradox theory from a “both-and” approach, a link is made to

transaction ecosystems based on digital platforms that enable the exchange of complementary resources

across national borders with reduced transaction costs. Hypotheses are theoretically derived and then

empirically tested using structural equation modeling in a quantitative study of 286 internationally

active automotive companies. Although the results of the study confirm the suitability of such digital

platforms for mitigating paradoxical tensions in international business, they also show that the

performance impact of these ecosystems for companies is still low and needs to be further improved

through the optimized use of various platform effects.

Keywords: digital platforms, ecosystems, paradoxical tensions, de-globalization, international

operations, automotive industry

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Submitted: 2023-03-15 / Accepted: 2024-10-13 / Published: 2024-11-20

Int. Journal of Business Science and Applied Management / Business-and-Management.org

1. INTRODUCTION

Research in the field of international business (IB) has for many decades been concerned with the

internationalization of multinational enterprises (MNEs) (Rugman et al., 2011), which can be regarded

as companies engaging in foreign direct investment (FDI) and which own or control value-added

activities in multiple countries (Dunning & Lundan, 2008). In those countries, companies hope to raise

sales of their products and services, buy cheaper or of better quality, benefit from better host country

conditions or escape poor conditions in their home markets (Cuervo-Cazurra et al., 2015). As a result,

the offshoring of companies has become highly relevant in IB and practice (Pedroletti & Ciabuschi,

2023). Today, MNEs are therefore represented with locations worldwide and are responsible for long

global value chains (Burger et al., 2018).

However, the COVID-19 pandemic in particular has triggered various developments that have a

notable influence on the global business landscape (Davlembayeva et al., 2024). A discussion on “de-

internationalization” (Kafouros et al., 2022; Tang et al., 2021) is increasingly evident in recent years,

picking up on debates on social and environmental sustainability (George & Schillebeeckx, 2022;

Ghauri et al., 2021), economic nationalism (Buckley, 2020; Lubinski & Wadhwani, 2020), and

difficulties in global supply chains in times of crisis (Ciravegna & Michailova, 2022; Sharma et al.,

2020). Alongside various obstacles that have always hampered internationalization (Cuervo-Cazurra et

al., 2007), the high volatility of the capital markets (Batra et al., 2024) increases the pressure on

companies to pursue asset-light strategies (Wang et al., 2020), while promising expansion in growth

markets at a great distance from companies’ home markets is very capital-intensive. These

developments contradict the intentions that companies seek with their internationalization processes.

Accordingly, paradoxical tensions (Smith & Lewis, 2011) between the contradictory motives behind

further investments in international operations and the scaling back of global value chains can be

assumed in companies.

The literature suggests exploiting the advantages of digital technologies related to

internationalization processes (Ahmad & Kitchen, 2008) as well as global value and supply chains

(Herbst, 2021). This results in a discussion about “a paradigm shift in the global strategy of MNEs

towards business ecosystems” (Cha, 2020) across national boundaries (Nambisan et al., 2019), usually

enabled by digital platforms (Kapoor et al., 2021). From a structural point of view, such ecosystems are

“defined by the alignment structure of the multilateral set of partners that need to interact in order for a

focal value proposition to materialize” (Adner, 2017). Ecosystems might be valuable in times of

conflicting changes on a global level, as they help to deal with high capital intensity (Mees-Buss et al.,

2019; Meyer et al., 2020), such as in the automotive industry (Teece et al., 2016), and supply chain

inefficiencies. In doing so, they enable markets to be reached beyond national borders, making service

abroad without a physical presence increasingly sustainable.

Since both internationalization and de-internationalization have only been extensively studied

separately (Pillich, 2024; Steinhäuser et al., 2021; Tang et al., 2021), this article sheds more light on the

contradictions between internationalization and de-internationalization from the perspective of paradox

theory (Cunha & Putnam, 2019). To this end, it will examine the extent to which the paradoxical

tensions actually affect companies and how these tensions can be reduced, establishing a link to the

research field of digital platforms and the resulting ecosystems (Gawer, 2021). In this context, the

influence of various platform effects on cross-border transactions will be considered. By collecting and

analyzing data from companies in the capital-intensive automotive industry, this article contributes to

how platform-based ecosystems can act as a mediation solution and enhance the success of companies

in the face of tensions in IB.

2. LITERATURE REVIEW

2.1 Paradoxical tensions in international management

Contradictions arise between the motives for expanding international operations and conflicting

motives for reducing international operations (Cha, 2020). International Operations can be understood

very comprehensively as “location-mode-combinations” that define the scope of a firm’s international

footprint (Békés et al., 2021). After first highlighting these contradictory motives, ways of dealing with

the opposing forces are presented from a paradoxical lens.

2.1.1 Motives for investments in international operations

Companies are intrinsically and extrinsically motivated (van Tulder, 2015) by numerous drivers to

expand into foreign markets (Buckley et al., 2007; Cuervo-Cazurra et al., 2015). According to Dunning

(1979; 2009), companies internationalize through FDI motivated by natural resource seeking, strategic

asset seeking, efficiency seeking and market seeking, resulting in ownership, location and

Christian Festing and Heike Proff

internalization (OLI) advantages. In more specific terms, companies are hoping for benefits such as

securing low-cost raw materials and production supplies of suitable quality, along with the use of

strategic assets such as know-how to increase competitiveness. In addition, there are drivers of

internationalization such as achieving risk diversification and economies of scale and scope in order to

increase efficiency as well as expanding sales, especially in countries with large market sizes and large

growth markets (Cui et al., 2014).

In this context, the important growth markets for MNEs are still located in countries outside

Europe, North America and Japan (Ghauri et al., 2021; Narula & Dunning, 2000). In the automotive

industry, for example, these growth markets are expected to be in the BRIC countries (Brazil, Russia,

India and China) and the MIST countries (Mexico, Indonesia, South Korea and Turkey) in the coming

years. Alongside the good sales opportunities, the local knowledge from these markets is important for

MNEs (Meyer et al., 2020), motivating MNEs to invest in international operations and strengthen

global supply chains (Contractor, 2022).

2.1.2 Motives for the dismantling of international operations

Despite all the motives for expanding, there have always been barriers and difficulties in the

context of internationalization (Cuervo-Cazurra et al., 2007). These include, for example, trade tariffs

(Kafouros et al., 2022), geographical distance and intercultural differences (Beugelsdijk et al., 2018;

Clark & Pugh, 2001; Kraus et al., 2015) between the countries in which companies operate, making

coordination along the value chains more difficult (Reuber et al., 2021). Those coordination and

adjustment processes along global value chains and between different country markets usually result in

high transaction costs for the companies involved (Osarenkhoe, 2008). The products, services and

processes of companies cannot usually simply be replicated in new countries but have to be adapted to

local requirements and needs (Tippmann et al., 2023). In this context, companies may have difficulties

transferring the value of resources and the resulting advantages to new country markets, as they often

lack the complementary resources needed to expand, compete or operate in new markets (Cuervo-

Cazurra et al., 2007). With increasing complexity due to international operations in countries that are

often very heterogeneous, diseconomies of scope set in at a certain point and efficiency advantages

diminish (Sakhartov, 2017). Buigues et al. (2015) have shown that there is an ideal degree of

internationalization that can be exceeded by companies and can lead to “over-internationalization”,

which in turn causes companies to reduce their international footprint.

Thus, in recent years, the terms “de-internationalization” (Kafouros et al., 2022; Pillich, 2024;

Tang et al., 2021) as well as “slowbalization” (Ghauri et al., 2021) and “de-globalization” (Luo & Witt,

2022; Petricevic & Teece, 2019; Witt, 2019) have been gaining popularity in practice and in the IB

literature. This development also stems from the growing tendency towards economic nationalism

(Buckley, 2020; Lubinski & Wadhwani, 2020), as can be seen in Brexit, as well as from the increasing

importance of climate protection, sustainability (Arena & Chiaroni, 2014; George & Schillebeeckx,

2022) and corporate social responsibility (Buckley & Casson, 2021). Due to recent crises such as the

war in Ukraine and the COVID-19 pandemic (Ciravegna & Michailova, 2022; Sharma et al., 2020), the

number of publications dealing with the dismantling of global supply chains is also rising (Buckley,

2020; Orlando et al., 2022). Cui et al. (2023), for example, speak of a “new vulnerability of

globalization”. What is more, MNEs, especially capital-intensive ones such as companies in the

automotive industry, are pushed towards asset-light strategies (Wang et al., 2020). As a result, the

literature increasingly suggests the concept of reshoring (Mukherjee et al., 2023; Pedroletti &

Ciabuschi, 2023), referring to the relocation of international operations back (“backshoring”) to the

home country (Dachs et al., 2019) or at least nearer (“nearshoring”) to the home country of a company

(Ancarani et al., 2019).

2.1.3 Paradoxical tensions and ways of managing them

Tensions are to be expected between these contradictory motives of companies to continue

investing in new growth markets on the one hand and to scale back international operations on the

other. Those tensions can be paradoxical when elements are contradictory but nevertheless interrelated

(Smith & Lewis, 2011). The conflicting goals and motives of the various stakeholders (Gavidia, 2016),

who advocate either a focus on internationalization or de-internationalization, are both interconnected

and contradictory. In this context, the term dilemma is used when competing choices arise (Smith &

Lewis, 2011) and actors weigh up the pros and cons and make trade-offs (Putnam et al., 2016).

In the literature on paradox theory (Lewis & Smith, 2022), two possible types of response to these

tensions are proposed (Agarwal et al., 2022). Defensive responses can take the form of “either-or”

decisions (Hargrave & van de Ven, 2017), for example by separating the opposing elements in time or

space or by favoring one of the elements. However, these “either-or” decisions can lead to poor

Int. Journal of Business Science and Applied Management / Business-and-Management.org

performance if the opposing elements are both important for the success of a company. Accordingly,

there are more active and more integrative “both-and” approaches that attempt to reconcile both poles

of the paradox (Raisch et al., 2018). To do this, these opposing poles need to be balanced in the long

term (Agarwal et al., 2022), and ways of mitigating (Berti & Simpson, 2021) or mediating (Michaud,

2014) them have to be found.

In the case of the “(de-)internationalization paradox”, both poles are necessary and can hardly be

separated from each other in terms of temporal and spatial aspects, which is why a “both-and”

approach (Raisch et al., 2018) in the form of a mediation solution should be followed instead. This

solution could lie in ecosystems based on digital platforms (Gawer, 2021).

2.2 Ecosystems based on digital platforms

In contrast to the original sociological understanding (Hawley, 1986) or the broad understanding

of Moore (1993), ecosystems today are usually understood as partnership networks, in which the

individual value streams are geared towards the realization of a joint solution (Dattée et al., 2018). This

replaces what used to be called “mastering the value chain” with “alignment among partners” (Adner,

2021). In this respect, such ecosystems make it possible to coordinate a number of different but

interdependent organizations without complete hierarchical ties (Jacobides et al., 2018) and thus reach

country markets beyond their own companies without a physical presence, especially if the partners

contribute strategic resources and asset-specific knowledge (Meyer et al., 2020). This allows

individuals or organizations to come together so that “they can innovate or interact in ways not

otherwise possible” (Cusumano et al., 2019). Being enabled by digital platforms (Kapoor et al., 2021),

ecosystems therefore offer new ways to compete globally (Bhatti et al., 2022).

In this context, a distinction is made between ecosystems based on innovation platforms and

transaction platforms (Cusumano et al., 2019; Gawer, 2021). While ecosystems based on innovation

platforms are understood as venues for the emergence of innovations (Cusumano et al., 2019),

transaction ecosystems based on transaction platforms (Rochet & Tirole, 2003) create multi-sided

marketplaces for the managed exchange of activities and assets worldwide (Nambisan et al., 2019).

With this in mind, digital platforms form the infrastructure that directly connects sellers, buyers and

other stakeholders in transaction ecosystems and they facilitate the exchange of values between them

(Cennamo, 2021), even across national borders.

Examples of such transaction platforms in the automotive industry are the platforms of Catena-X,

Gaia-X, E2open or Material.One. These promise to connect various players along the automotive value

chain both vertically and horizontally and to optimize their exchange and coordination processes.

Accordingly, the remainder of this article does not consider innovation platforms for the mediation of

the paradoxical tensions. Instead, it focuses on transaction platforms and associated ecosystems, which

enable a transformation of value creation through an exchange between actors on a global level

(Nambisan & Luo, 2021) and therefore a market expansion in an asset-light way without large

investments.

2.3 Potential of digital platform effects for global strategy

The ability of transaction ecosystems to optimize exchange processes globally and thus mediate

the paradoxical tensions is enabled by several platform effects (Hagiu & Rothman, 2016). First, digital

platforms in ecosystems allow for increased modularization (Baldwin & Clark, 1997; Schmidt & Foss,

2023) by decomposing complex systems into smaller systems and subsystems (Herbst, 2021). This

means that interdependent components of a system can be produced or used jointly by different actors

worldwide via standardized interfaces (Dai, 2023; Loonam & O'Regan, 2022), with limited

coordination and without major capital investment (Cha, 2020).

Next, digital platforms facilitate the use of complementarities (Dyer et al., 2018; Milgrom &

Roberts, 1990), which can be explained by economies of scope (Sakhartov, 2017; Teece, 1982).

Complementarities are a prerequisite for joint value creation in ecosystems (Jacobides et al., 2018) and

create supply-side economies of scope in production. Such economies of scope are possible globally by

means of joint task performance or division of labor via platforms, allowing global “access to a variety

of goods and services” (Cusumano et al., 2019). In line with the resource-based view (Peteraf, 1993;

Peteraf & Barney, 2003), complementarities result from the critical VRIN (valuable, rare, inimitable

and non-substitutable) resources (Barney, 1991) of the partner companies. On a global level, this

enables a transformation of value creation through “resource combination in foreign markets”

(Nambisan & Luo, 2021).

In addition, there are complementarities in consumption (Jacobides et al., 2018). According to the

service-dominant logic (Vargo & Lusch, 2004; 2008), these are explained by demand-side economies

of scope via value co-creation with customers. Since transaction ecosystems foster the exchange with

Christian Festing and Heike Proff

global customers through platforms, value co-creation with these customers is possible by adapting to

their wishes and incorporating their suggestions for improvement (Nambisan & Luo, 2021).

Viewed from a scaling in the network, digital platforms enable economies of scale (Gawer, 2021).

While supply-side economies of scale play a key role in limiting costs, economies of scale on the

demand side arise from network effects (Agarwal et al., 2023) between market and hierarchy, including

across global platforms (Iansiti & Lakhani, 2020). On this basis, network externalities can be justified

(Rietveld & Schilling, 2020), in which the benefit of an individual or organization from a good depends

on the number of other users of that good (Dai, 2023). Thus, digital platforms can be seen as an enabler

or accelerator of scaling across borders with limited costs for cross-border transactions (Tippmann et

al., 2023).

On digital platforms, it is also possible to manage prices (Weyl, 2010) and quantities on multiple

sides separately by pricing in multi-sided markets (Cusumano et al., 2019). One side can be subsidized

where it is advisable to subsidize the more price-sensitive side of the network and to switch the side

that increases its demand more in response to the growth of the other side (Eisenmann et al., 2006). In

this way, pricing on digital platforms contributes to distributing additional costs among the partners.

Enabled by increasing amounts of data, digital platforms can benefit from data-based learning, for

which the potentials of artificial intelligence need to be decisively exploited (Iansiti & Lakhani, 2020).

Data can thus be used for scaling, continuous improvement and to create something new (Verganti et

al., 2020). These learning effects create an adaptation mechanism in the dynamic stability of the

ecosystem, in that permanent learning is used to adapt to changes or to compensate for outflowing

knowledge. Thus, learning effects are a prerequisite for strategic flexibility (Rialti et al., 2020) and for

a high degree of automation (Raisch & Krakowski, 2021) within these platforms, which promotes

asset-light paths in companies.

Despite all the advantages of digital platforms, it should be noted that there is a risk of resources

and capabilities being diverted to the partners in the network (Sommer, 2022). This is particularly

critical when companies operate in a situation of cooperation with competitors (Hannah & Eisenhardt,

2018) in the sense of “coopetition” (Bengtsson & Raza-Ullah, 2016). Accordingly, limiting the outflow

of capabilities to partners, especially to competitors, is necessary (Krylova et al., 2016) through

effective governance in transaction ecosystems (Chen et al., 2022; Dyer et al., 2018). This is possible,

for example, through rules and regulations, including data security and access to platforms (Cusumano

et al., 2019).

3. HYPOTHESES

In the IB literature, the existence of motivational tensions in connection with internationalization

processes is discussed between global and local activities (van Tulder, 2015), with, for example,

tensions between headquarters and subsidiaries being identified (Ambos et al., 2020). Recent

developments in the corporate environment of MNEs are leading to increased discussions about the de-

internationalization of companies (Tang et al., 2021). It can therefore be assumed that companies are

under pressure from various stakeholders to increase sustainability and pursue asset-light strategies,

among other things. As a result, there are increasing calls for a reduction in global supply and value

chains, especially considering the recent crises. Although the risks in supply chains due to increasing

dynamics, uncertainty and man-made as well as naturally occurring crises have long been recognized

(Singhal et al., 2011), the importance of resilience (Hillmann, 2021) to these risks is now becoming

more widely acknowledged. On the other hand, however, the benefits of investing in international

activities still exist and new growth markets reveal great potential (Cui et al., 2014). Thus, companies

have to make trade-offs with regard to their global strategies and are subject to tensions. These

considerations are also supported by Heucher et al. (2024), who see the emergence of knotted tensions

as a result of the sustainability transformation, especially in the context of global strategies in MNEs.

Accordingly, a strongly perceived “(de-)internationalization paradox” can be supposed in MNEs,

arising from tensions between investing in new growth markets and scaling back international activities.

This raises the first hypothesis:

H1: MNEs are experiencing a high degree of paradoxical tensions between motives to expand into

new country markets and to scale back international operations.

There are various approaches to reacting to paradoxical tensions on the basis of paradox theory

(Lewis & Smith, 2022). For the “(de-)internationalization paradox”, approaches from the “both-and”

category, which offers the use of mitigation solutions (Berti & Simpson, 2021) or mediation solutions

(Michaud, 2014), are suitable.

The use of digital platforms (Gawer & Cusumano, 2014; Kapoor et al., 2021) can create online

marketplaces for the managed exchange of goods, activities and assets in transaction ecosystems

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(Rochet & Tirole, 2003), even globally (Nambisan et al., 2019). Enabled by the several platform effects

(Hagiu & Rothman, 2016), exchange processes can be optimized across national borders in this context.

For example, platforms strengthen standardization on a global level (Loonam & O'Regan, 2022) as well

as interfaces between individual business activities along value chains (Cano-Kollmann et al., 2016). In

this way, they reduce transaction costs (Deng et al., 2022; Hagiu & Wright, 2015), including the costs

of cross-border transactions (Tippmann et al., 2023). Digital platforms further help as companies often

lack the complementary resources which they need in addition to their own ones, to expand into foreign

markets (Cuervo-Cazurra et al., 2007). By collaborating with complementary partners on digital

platforms in transaction ecosystems (Jacobides et al., 2018), companies can obtain and share the

resources they require to operate successfully in foreign markets (Nambisan & Luo, 2021). In this

context, supply-side economies of scope can arise within digital platforms, which can be decisive in

further increasing efficiency and they thus contribute significantly to reducing investment costs when

reaching foreign markets. Moreover, network effects offer, for example, the strategic opportunity to

reach new customers across national borders (Banalieva & Dhanaraj, 2019) quickly and without

additional costs via platforms and thus allow for easy and cost-neutral scaling on the demand side (Dai,

2023).

These platform effects therefore enable “making business scalable flexibly without investments in

heavy assets” internationally (Cha, 2020). Just as globalization in the 1990s was driven by falling

transport, travel and communication costs, the exchange via digital platforms today is driving the

possibilities of new forms of global cooperation (Meyer et al., 2020). In this way, transaction platforms

could counterbalance the paradoxical tensions described above and enable MNEs to benefit from new

international markets without having to invest heavily in these markets and build up local activities.

Against this background, it can be assumed that the more strongly companies are affected by the

paradoxical tensions, the more likely it is that they will seek and apply mediation solutions and thus use

digital platforms that could offer such a solution. This poses the next hypothesis:

H2: The higher the degree of paradoxical tensions between motives to expand into new country

markets and to scale back international operations, the greater the use of transaction ecosystems based

on digital platforms in MNEs.

According to paradox theory, the success of companies increasingly depends on how they are able

to address contradictory requirements (Smith & Tracey, 2016). It can therefore be assumed that the

mediation of the paradoxical tensions through joint value creation in transaction ecosystems has a

positive influence on the success of companies.

Explanations of joint value creation in ecosystems are based on game theory explanations using

biform games (Brandenburger & Stuart, 2007; Ross, 2018), according to which the participating

partner companies autonomously contribute value creation activities in a non-cooperative phase and

negotiate about how the added value will be shared in the cooperative phase. Thus, the success of the

ecosystems as a mediation solution could be reflected in the form of relational rents (Dyer et al., 2018;

Lavie, 2006), which Dyer & Singh (1998) define as “supernormal profit jointly generated in an

exchange relationship that cannot be generated by either firm in isolation and can only be created

through the joint idiosyncratic contributions of the specific alliance partners”. This is because

ecosystems make it possible to generate rents from global customers who can only be reached in

cooperation with partners from foreign markets via transaction platforms. This gives rise to the first

hypothesis on success in companies:

H3: The greater the use of transaction ecosystems based on digital platforms in face of

paradoxical tensions related to international operations, the higher the relational rents in MNEs.

In addition, a growth in a company’s success as a result of platform use could be reflected in the

form of increased performance (Kumar et al., 2022), since the effects of digital platforms (Hagiu &

Wright, 2015) reduce costs and the loss of value of resources.

In MNEs, resources can already be transferred between several subsidiaries (Patriotta et al., 2013).

Unfortunately, resources as well as competences (Prahalad & Hamel, 1990) and capabilities (Gaur et

al., 2019) are generally classified as quasipublic goods (Buchanan, 1965), which, contrary to public

goods (Morgan & Tumlinson, 2019), are not transferrable as often as desired (Zander & Kogut, 1995).

Being integrated into complex processes and routines (Bloodgood, 2019) and with each reuse therefore

causing high transaction costs (Burmeister et al., 2016), the transferability of these resources is

constrained. Via digital platforms, however, complementary resources (Dyer et al., 2018) within the

transaction ecosystem can be considered public goods, with low transaction costs at best, also globally

(Nambisan & Luo, 2021). In this context, if more than two partners share stable information on digital

platforms, their interaction increases (Gawer & Cusumano, 2014) and joint solutions are likely to be

Christian Festing and Heike Proff

even more successful (Autio et al., 2021; Benner & Waldfogel, 2020). This is due to the fact that

platforms enable companies to limit the loss of value of the transferred resources and capabilities

through effective governance (Chen et al., 2022). Rules and norms help to set a common standard, as

foreign markets vary greatly due to cross-cultural differences (Stallkamp & Schotter, 2021). As a result,

the performance should increase due to the use of platform-based ecosystems, for example through

optimized global customer search, the company’s worldwide presence and the immediate transmission

of information (Deng et al., 2022), even with a high number of cross-border transfers (Tippmann et al.,

2023). This justifies a further hypothesis with regard to success:

H4: The greater the use of transaction ecosystems based on digital platforms in face of the

paradoxical tensions related to international operations, the higher the performance in MNEs.

4. METHODOLOGY

The hypotheses have to be validated by a quantitative study and include several variables that are

linked by multivariate correlations and can be statistically tested by a causal analysis. Causal analyses

with latent variables can be carried out using structural equation modeling (SEM). Through the

simultaneous combination of factor analyses and regression approaches (Haenlein & Kaplan, 2004),

such SEM methods allow a comparatively simple discussion of complex relationships and models

(Dash & Paul, 2021), which would not be possible using regression analysis exclusively. With

covariance-based SEM (CB-SEM), and SEM with partial least squares (PLS-SEM), two main types of

SEM are available for statistical analyses (Cepeda-Carrion et al., 2019). In business research,

particularly in the context of often complex issues in IB (Richter et al., 2022), PLS-SEM has become

established for the estimation of causal models containing latent variables (Henseler et al., 2015). The

superiority of PLS-SEM is particularly emphasized for the investigation of mediation effects (Sarstedt

et al., 2020), such as those present in this article. In addition, this form of structural modeling provides

reliable results even with relatively small samples in large models (Vaithilingam et al., 2024).

Accordingly, the PLS-SEM approach is used for this study.

4.1 Variables

The individual variables were operationalized (Table 1) so that they can be measured (Eisend &

Kuß, 2017) in a survey and later transferred to a structural equation model. The variables used to

determine the paradoxical tension between internationalization and de-internationalization are

constructs for the opposing poles. In order to ensure sufficient reliability and validity, it has become

established in research to use at least three indicators per construct. The internationalization side was

therefore operationalized through motives for investing in international operations in order to gain

access to growth markets [Int1] and to adapt to different customer requirements [Int2] and intercultural

characteristics [Int3]. The de-internationalization side, in contrast, was operationalized via motives for

withdrawing from foreign markets with the aim of reducing capital requirements and acting in an asset-

light way [De-Int1] as well as reacting to rising nationalism [De-Int2] and increasing sustainability

[De-Int3] within the company. It should be noted that international operations were not further

specified in this context, for example, as different modes (such as trade via exports or imports and

production via outsourcing or foreign direct investment) or different regions or countries to calculate

the international footprint (Békés et al., 2021) or a transnationality index (Buigues et al., 2015; Casella

& Formenti, 2018). Using a seven-point Likert scale (Dolnicar & Grün, 2013), the variables were

captured from “Does not apply at all” (1) to “Fully applies” (7).

The use of digital platforms in transaction ecosystems is included in the model as a latent variable

and therefore as a construct that cannot be measured directly. This construct is calculated from

observable indicators within the framework of structural equation models (Hair et al., 2017). The use of

digital platforms was therefore determined via indicators in the form of latent variables that arise from

the various platform effects. In line with the previous literature review, modularization [Modul],

(supply-side) complementarities [Complement], value co-creation with customers [Co-Creation],

network effects [Network], pricing [Pricing], data-based learning [Learning] and limitation of the

outflow of resources and capabilities [Limit] were included, as all of these indicators are relevant for

recording platform utilization in the face of tensions. The seven variables are formative as they form

the construct together as indicators and are not manifestations of the construct, as is the case with

reflective variables (Diamantopoulos et al., 2008). In this context, these indicators were selected in

such a way that they extend the impact of the platform effects to the special framework conditions of

the paradoxes between the internationalization and de-internationalization of companies. The variable

modularization across transaction platforms in an ecosystem [Modul] draws, for example, on sources of

modularization (Baldwin & Clark, 1997; Jacobides et al., 2018), but also considers the specificities of

Int. Journal of Business Science and Applied Management / Business-and-Management.org

globally used transaction platforms (Cusumano et al., 2019; Nambisan et al., 2019; Rochet & Tirole,

2003). Again, the indicators were formed using a seven-point Likert scale ranging from “Does not

apply at all” (1) to “Fully applies” (7).

Success was also operationalized with formative scales, on the one hand, by relational rents [Rents]

(Dyer & Singh, 1998; Dyer et al., 2018) according to Lavie (2006), as revenues that in part no longer

have to be shared [Rents1] as well as revenues that are distributed among the partners through fixed

agreements [Rents2] and negotiations [Rents3]. A seven-point Likert scale from (“Does not apply at

all”) to 7 (“Fully applies”) was again used for this purpose. On the other hand, a record is made of the

potential improvement in a company’s performance [Performance] by collaboration in transaction

ecosystems via global transaction platforms. To this end, variables were used to capture the increase in

profitability [Perf1] (Kumar et al., 2022), the share of total revenues achieved with such collaboration

[Perf2] (Wang et al., 2021) and cost savings [Perf3] (Ramanathan & Gunasekaran, 2014), all on a

seven-point Likert scale from 1 (0%) to 7 (>25%).

Finally, the amount of revenue, the number of (full-time) employees and the number of countries

in which a company operates were surveyed as control variables. The operationalization results in a

formative research model.

Table 1: Operationalization of the variables

Construct Indicator Operationalization Source

Paradoxical

tensions

related to

international

operations

[Tensions]

Motives for

internationalization

[Int1]

Consistent investment in markets outside Europe,

North America and Japan to secure access to these

growing markets.

Narula &

Dunning, 2000;

Ghauri et al.,

2021

Motives for

internationalization

[Int2]

Consistent investment in markets outside Europe,

North America and Japan to meet the diverse

customer needs there.

Motives for

internationalization

[Int3]

Consistent investment in markets outside Europe,

North America and Japan to meet the cross-cultural

specificities there.

Motives for de-

internationalization

[De-int1]

Consistent reduction of international operations to

reduce capital intensity (according to “asset-light”

strategies).

Cha, 2020

Motives for de-

internationalization

[De-int2]

Consistent reduction of international operations to

meet the rising nationalism in many countries.

Buckley, 2020

Motives for de-

internationalization

[De-int3]

Consistent reduction of international operations to

meet the increasing demands for sustainability.

Ghauri et al.,

2021

Digital

Platforms in

transaction

ecosystems

(Cusumano

et al., 2019;

Nambisan et

al., 2019;

Rochet &

Tirole, 2003)

[Platform]

Modularization

[Modul]

Improving international activities through exchange

with partners via digital platforms with clear

interfaces.

Baldwin & Clark,

1997; Jacobides

et al., 2018

Complementarity

[Complement]

Improvement of international activities through

task sharing with complementary partners via

digital platforms.

Milgrom &

Roberts, 1990;

Jacobides et al.,

2018

Co-creation

[Co-Creation]

Improvement of international activities through

exchange with worldwide customers via digital

platforms in the partner network.

Vargo & Lusch

2004; 2008

Network

[Network]

Improvement of international activities through

new customers in other country markets, which can

be won in the network via platforms at minimum

costs.

Rietveld &

Schilling, 2020

Pricing

[Pricing]

Improvement of international activities through

cross-subsidization of customers in individual

country markets via digital platforms in partner

networks.

Eisenman et al.,

2006; Cusumano

et al., 2019

Learning

[Learning]

Improving international activities through joint

learning via digital platforms in partner networks.

Iansiti & Lakhani,

2020

Limiting

[Limit]

Improving international activities by limiting the

outflow of resources and skills to network partners

via digital platforms.

Krylova et al.,

2016

Christian Festing and Heike Proff

4.2 Conduct of the survey

A standardized questionnaire was developed to conduct the research. Whether the questionnaire

would be properly understood was evaluated by a pre-test with 20 companies, which checked the

comprehensibility of the operationalization and question formulations to ensure the validity of the

survey (Hair et al., 2017). The reliability of the survey was secured by programming the online

questionnaire as user-friendly as possible.

The survey was conducted using an online questionnaire completed by automotive companies

(OEMs and suppliers) with their headquarters in countries with an important automotive industry in

Europe, North America or Asia and with revenues of more than $50 million. Focusing on one industry

had the advantage of increasing the comparability of companies, since industry effects were eliminated

(Miozzo & Yamin, 2012). The automotive industry was chosen because it is particularly capital-

intensive, characterized by global supply chains and subject to growing conflicts of interest (Munten et

al., 2021; Teece et al., 2016). A total of 3,000 automotive companies were contacted in April and May

2022. 456 companies participated in the study. 125 of these companies had to be eliminated due to

incompleteness or undifferentiated response behavior (for example, if a scale value of 4 was always

indicated).

To ensure that the companies surveyed had a sufficient ecosystem orientation, four questions on

the ecosystem criteria according to Adner (2017) were included in the questionnaire, which were used

as exclusion criteria. Accordingly, of the remaining 331 companies, a further 45 companies (13.6%)

were eliminated as they showed a lack of ecosystem focus (i.e., they answered the four questions on the

ecosystem criteria with “I do not agree at all” (scale value 1) or with “I do not agree” (scale value 2)).

In this way, data from 286 companies was generated for the next analysis stage. The response rate

was 9.5%. The contacts were people from the strategy or organization departments of the companies in

question. For smaller companies, the CEO or a member of the management board was requested to

participate in the survey.

A PLS-SEM algorithm (Henseler et al., 2015) in the Smart PLS4 software was used to estimate

the structural model (Figure 1) with the collected data of the included variables. Additionally, the

reliability and validity of the variables and the model (Hair et al., 2020) as well as the significance of

the path coefficients were checked. To this end, the bootstrapping method was performed as a two-

tailed test at a significance level of 0.05 with 5000 samples.

Figure 1: Structural model

Since the PLS-SEM algorithm is not suitable for calculating the extent of the paradox, a different

approach had to be chosen in a first step to determine this variable. For this purpose, mean values for

the side of internationalization [Int-mean] and the side of de-internationalization [De-int-mean] were

first formed from the variables consisting of motives for further internationalization [Int1, Int2, Int3]

and for withdrawal from foreign markets [De-int1, De-int2, De-int3]. As the mean values of these two

opposing poles contrast with each other, the desired magnitude of the extent of the paradoxical tension

that arises between these two poles cannot be formed by a further mean value between these values.

Instead, the mean values of both poles were divided into the three categories “weak” (mean values

from 1 to 3), “medium” (mean values from 3 to 5) and “strong” (mean values from 5 to 7), which

Int. Journal of Business Science and Applied Management / Business-and-Management.org

represent weak, medium and strong motives for investing in foreign markets or scaling back

international operations. Based on the two opposing poles, a new variable was then determined, which

represents the extent of the perception of the paradoxical tensions [Tensions] with a range of 1 to 4.

This perception of paradoxical tensions by companies was classified as strong (4) if the motives for

both poles are “strong”, medium (3) if the motives for one pole are “strong” and for the other

“medium”, weak (2) if the motives for both poles are “medium”, and not present (1) if the motives for

at least one of the two poles are “weak”. Accordingly, the variable of paradoxical tensions was later

included in the structural equation model without underlying variables.

5. RESULTS

Out of the 286 companies from the automotive industry surveyed, 50% (143 companies) have

their headquarters in Europe (Germany, Spain, France, Italy, Poland or UK), 32.9% (94 companies) in

North America (USA, Canada or Mexico) and the remaining 17.1% (49 companies) in Asia (Japan,

South Korea and China).

Of these, 3% are automotive manufacturers (OEMs), the remaining 97% are suppliers, so 111

(38.8%) companies have revenues below $1bn (17 or 5.9% between $50m and $100m) and 103 (36%)

have revenues between $1bn and $5bn. In 72 companies (25.2%) the revenues are $5bn or higher. The

distribution of (full-time) employees is similar. 144 (50.3%) of the automotive companies surveyed

have fewer than 10,000 employees, 87 (more than 30%) have between 50,000 and 10,000 employees

and only 55 companies (19.7%) have more than 50,000 employees. This is in line with the result that

174 of the companies surveyed (60.8%) deal with between two and 10 foreign markets, 48 (16.8%)

between 11 and 30 foreign markets, 42 (14.7%) between 31 and 100 foreign markets and only 22

companies (7.7%), Tier 1 suppliers and OEMs in particular, deal with over 100 foreign markets. An

overview of the mean values and standard deviations of the variables surveyed in these companies is

given in Table 2.

Table 2: Results of the survey

Group Variable Mean SD Min Max

Internationalization

Int1 5.300 1.350 1 7

Int2 5.390 1.320 1 7

Int3 5.320 1.400 1 7

Int-mean 5.340 1.190 1 7

De-internationalization

De-int1 4.900 1.590 1 7

De-int2

4.790

1.640

De-int3 5.120 1.610 1 7

De-int-mean 4.940 1.480 1 7

Paradoxical tensions Tensions 3.180 1.100 1 4

Digital Platform

Modul 5.180 1.260 1 7

Complement 5.200 1.270 1 7

Co-Creation 5.540 1.220 1 7

Network 5.410 1.190 1 7

Pricing 5.370 1.210 1 7

Learning 5.350 1.220 1 7

Limit 5.370 1.290 1 7

Rents

Rents1 5.270 1.180 1 7

Rents2 5.330 1.220 1 7

Rents3 5.420 1.140 1 7

Performance

Perf1 3.810 1.530 1 7

Perf2 3.700 1.440 1 7

Perf3 3.510 1.460 1 7

Notes: SD = Standard deviation; Min = Minimum; Max = Maximum

Christian Festing and Heike Proff

Regarding international operations, the results show that the companies’ motives for further

investing in new markets are slightly stronger (Int-mean = 5.34) than the motives for scaling back

international operations (De-int-mean = 4.94). All internationalization variables achieve similarly high

values. This shows how important these new growth markets are for automotive companies and that

these companies cannot afford to leave the sales potential and other advantages they expect to gain in

foreign markets unexploited. However, the variables on the motives for de-internationalization also

achieved high results, with the intention to increase sustainability (De-int3 = 5.12) having the highest

value.

This means that both poles are very pronounced in their average values, which matches the results

on the extent of the perceived paradoxical tensions. As the distribution in Figure 2 shows, more than

half of the companies surveyed perceive strong paradoxical tensions between investing in new growth

markets and scaling back international operations, while only 14% experience no tensions at all. In this

context, the sample shows a high average score of 3.18 for recognized tensions, on the scale from 1 (no

perception of tensions) to 4 (strong perception of tensions). Thus, hypothesis H1 on the extent of

paradoxical tensions can be confirmed, since the surveyed variables of both poles, internationalization

and de-internationalization, as well as the formed variable on the extent of tensions, show significant

values.

Figure 2: Extent of paradoxical tensions related to international operations

With regard to the structural model, criteria were examined to verify the validity and reliability of

the variables and the model. The variance inflation factor (VIF) can be used to rule out a potential

collinearity problem (Diamantopoulos et al., 2008), as the VIF for all variables is between about 1 and

3 and therefore well above the recommended minimum value of 0.2 and well below the recommended

upper limit of 5 (Hair et al., 2017). In the evaluation, criteria such as the Standardized Root Mean

Square Residual (SMSR = 0.033 < 0.08) and the Normed Fit Index (NFI = 0.969 > 0.9) also indicate a

very good model fit. According to Hair et al. (2017), the outer weights are the primary criterion to

evaluate the relative importance of indicators in formative measurement models.

The results relating to indicators in the PLS-SEM are summarized in Table 3. The calculation of

the PLS-SEM model shows that, with a value of 0.629, there is a high path coefficient between the

variable paradoxical tensions and the latent variable for the use of digital platforms (Tensions →

Platform). With a p-value of 0.000, this coefficient is highly significant. Hypothesis H2 and thus the

use of such platforms as a mediation solution for paradoxical tensions in relation to international

operations can therefore be confirmed. The coefficient of determination R² for the latent platform

variable is 0.395 and thus clearly exceeds the threshold value of 0.26 demanded by Cohen (1988) for

the explained variance in order to be considered substantial.

Each of the seven manifest variables, which were operationalized via the platform effects, has a

positive influence on the latent platform variable (Table 3). The platform effects of limiting the outflow

of resources and capabilities (Limit → Platform), modularization (Modul → Platform) and

complementarity (Complement → Platform) have the highest outer weights and can be demonstrated

with a significance level of p < 0.01. However, the effects of data-based learning (Learning →

Platform), pricing (Pricing → Platform) and value co-creation with global customers (Co-Creation →

Platform) have to be discarded because the three outer weights are not significant (all three p-values >

0.05).

Int. Journal of Business Science and Applied Management / Business-and-Management.org

Table 3: Results relating to the indicators of the PLS-SEM

Latent

variable

Indicators Outer weights P-value VIF

Platform

Modul → Platform 0.293** 0.000 2.396

Complement → Platform 0.116** 0.000 2.250

Co-Creation → Platform 0.087 0.203 1.928

Network → Platform 0.116 0.072 1.979

Pricing → Platform 0.078 0.236 2.323

Learning → Platform 0.002 0.973 2.427

Limit → Platform 0.398** 0.000 2.139

Rents

Rents1 → Rents 0.292** 0.000 1.721

Rents2 → Rents 0.481** 0.000 1.657

Rents3 → Rents 0.416** 0.000 1.611

Performance

Perf1 → Performance 0.357 0.675 2.921

Perf2 → Performance 1.148 0.241 2.543

Perf3 → Performance -1.340 0.221 2.481

Notes: ** significant at a level of 0.01

The study further confirms that greater use of transaction platforms in ecosystems in the face of

tensions relating to international operations will increase companies’ success. A significant path

coefficient of 0.751 (p = 0.000; R2 = 0.563) was calculated from platform use to relational rents

(Platform → Rents) regarding the impact on success in companies. However, the other results show

that the impact of platforms on performance (Platform → Performance) is not significant (p = 0.488;

R2 = 0.009). Thus, the performance, neither in terms of profits nor costs, has so far been influenced

using platforms as a mediation solution. Accordingly, only hypothesis H3 on the positive influence on

relational pensions can be confirmed, while hypothesis H4 on the influence on performance must be

rejected. These results are also supported by the effect sizes f², which, according to Cohen (1988),

expresses a large effect of independent variables on dependent variables in SEM starting at a value of

0.35. The results relevant to the hypotheses tested via PLS-SEM (H2, H3 and H4) are summarized in

Table 4.

Table 4: Results relating to the hypotheses tested in PLS-SEM

Path

coefficient

P-value R² f² Hypotheses

Tensions → Platform 0.629** 0.000 0.395 0.653 H2 confirmed

Platform → Rents 0.751** 0.000 0.563 1.290 H3 confirmed

Platform → Performance 0.097 0.488 0.009 0.009 H4 rejected

Notes: **significant at a level of 0.01

By including the control variables, the results on the use of platforms in the face of paradoxical

tensions are further validated. When calculating an alternative model in which, next to the path from

tensions to platform, three further paths to platform use are added from the control variables of number

of employees, amount of revenue, and number of operating countries, the correlation between the

paradoxical tensions and the platforms remains very high with a path coefficient of 0.58. In this model,

the number of employees has no significant influence, the number of operating countries has a weak

negative influence (path coefficient -0.17), and the amount of revenue has a slightly positive influence

(path coefficient 0.21) on platform use.

6. DISCUSSION AND IMPLICATIONS

6.1 Discussion of results

The study shows that the companies surveyed in the automotive industry as a traditional, global

industry largely have the topic of building ecosystems on their agenda. At the same time, however, it

has become obvious that the companies are not allowing themselves to be pushed into dismantling their

Christian Festing and Heike Proff

global structures by crises, nationalization tendencies, supply chain problems, the need for

sustainability or the high volatility in capital markets. More than 85% of the 286 companies from the

study perceive at least partial tensions between the need for asset-light strategies and a reduction of

international operations on the one hand and investment in the expansion of international activities in

growing markets outside the triad on the other hand. However, they are seeking solutions to deal with

this paradox. Digital platforms are an active problem-solving opportunity for MNEs, not just a reaction

to changes in the competitive environment. Kafouros et al. (2022) distinguish between voluntary and

forced de-internationalization and re-internationalization in this respect. MNEs are already striving for

asset-light internationalization, since otherwise a negative effect on performance in the medium term is

certain in any case with regard to the external circumstances.

However, the results show that digital platforms in transaction ecosystems have not yet had a

major impact on the performance of automotive companies. This can be partly explained by the fact

that automotive companies were heavily affected by the crises of the Ukraine war and the COVID-19

pandemic in 2022. Another explanation is that automotive companies, as “traditional” companies, are

only just beginning to make greater use of the opportunities offered by digital platforms. This is

because although the added value of digital platforms is known, the diffusion and adoption of these

platforms in companies' processes is not automatically guaranteed and they usually have to be

introduced gradually (Vega & Chiasson, 2021). The influence of digital platforms on the performance

of companies from other sectors is likely to be significantly more positive in some cases. For example,

companies from the IT sector such as Google or Meta, which have been relying on platform solutions

for some time or have already built their offerings on them from the outset, have more experience in

exploiting platform effects for themselves (Hartmann & Henkel, 2020).

In this context, the study shows that complementarity, limiting the outflow of resources and

capabilities as well as modularization, are currently playing an important role in the development of

transaction platforms, as companies are already taking actions in these areas. However, they are not yet

tackling pricing, value co-creation with the customer and data-based learning. This fits with the results

relating to success, according to which relational rents are already significantly higher today than

performance. This is because, according to Dyer & Singh (1998) and Dyer et al. (2018), relational rents

are based on complementary resources and capabilities and effective governance (limiting the

capability drain), complemented by interfirm relation-specific assets and interfirm knowledge-sharing

routines (Weber et al., 2016), which support complementarity and governance. Improving performance

through collaboration in platform-based ecosystems also requires, among other things, value co-

creation together with the customer and data-based learning.

6.2 Implications for research

The results from this study contribute to the existing research on paradoxical tensions in

(international) management (Heucher et al., 2024; Lewis & Smith, 2022), in particular to research

dealing with the mitigation of contradictory yet interrelated poles through a "both-and" approach (Berti

& Simpson, 2021). In this context, it could be shown that digital platforms in transaction ecosystems

are used as a third variable to balance and mediate the tensions between contrasting motives for further

internationalization and for de-internationalization. In contrast to a determination of core values, which

mediates the conflict about shared cultural values between a parent company and subsidiaries as a

result of multiple embeddedness (Meyer et al., 2011) on a sub-level (Proff, 2018), the tensions are

addressed here on the higher cross-company level of ecosystems based on digital platforms. These

considerations should be further investigated. Digital platforms in ecosystems differ from the product

platforms, which have been increasingly used in the automotive industry in recent decades in the sense

of shared use of physical components (Agrawal et al., 2013), since they are less capital-intensive and

they help to pursue asset-light strategies.

The results also contribute to the existing research on the “paradigm shift in the global strategy of

MNEs towards business ecosystems” (Cha, 2020) across country borders (Tippmann et al., 2023), in

particular using transaction platforms (Nambisan et al., 2019). However, there is still a lot of research

to be done on how the paradigm shift can succeed, even if more research has already been undertaken

than is being translated into action in corporate practice. This is because, although the companies

surveyed are not yet addressing all platform effects sufficiently, a great deal of research is already

being carried out on these issues (Hagiu & Rothman, 2016).

However, the possibilities of effective governance seem to have been much less thoroughly

explored than their significant influence on digital platforms and the relatively high relational rents of

the companies surveyed would suggest. Specifically, further consideration needs to be given to the

implementation and protection of the outflow of resources and capabilities to partners who are

competitors outside the network (Krylova et al., 2016). This requires stronger wiring of effective

Int. Journal of Business Science and Applied Management / Business-and-Management.org

governance mechanisms (Cusumano et al., 2019; Dyer et al., 2018). That is why Gawer (2021), for

example, demands a deeper look inside the joint value creation and value capture in global transaction

ecosystems, followed by Adner (2021), who calls for more research on value capture by the partners in

a transaction ecosystem between their own business model optimization and maximization of the joint

ecosystem effects.

The still low impact of the use of digital platforms in ecosystems on performance, given the

paradoxical tensions related to international operations that emerge from the study, also justifies the

importance of further research to study the design and alignment of ecosystems over time (Dattée et al.,

2018). This involves a dynamic perspective on how minimum viable ecosystems can be built and can

then improve performance, for example, by incubating, identifying and integrating stakeholders (Rong

et al., 2015). In addition, the role of the location of MNEs’ head office should be examined more

closely in this context, since Stallkamp & Schotter (2021), for example, emphasize the influence of

cultural differences as well as of geographic distance.

Finally, there should also be further investigation of the potential significance of ecosystems for

existing IB theories (Cha, 2020), for example because the theory of internalization (Buckley & Casson,

1976) now needs to be linked with network theory (Buckley, 2020; Nambisan & Luo, 2021). Instead of

the ownership, localization and internalization (OLI) advantages in the eclectic theory of Dunning

(1979), “ecosystem-specific advantages” are now possible (Li et al., 2019; Nambisan et al., 2019;

Nambisan & Luo, 2021), as described, for example, by Luo (2021) with open resource, linkage and

integration (new OLI) advantages for digital globalization.

6.3 Implications for practice

Moreover, several practice-related implications can be drawn from the study. MNEs should face

up to the conflicting goals in international management and not hastily follow the demands for an

exclusive focus on domestic markets in view of the tendency towards de-globalization (Buckley, 2020;

Petricevic & Teece, 2019). As the study shows, the use of digital platforms in transaction ecosystems at

a global level makes it possible to realize asset-light internationalization (Mees-Buss et al., 2019;

Meyer et al., 2020) with reduced physical presence in geographically distant markets and defuse

paradoxical tensions associated with international operations.

Therefore, capital-intensive MNEs need to focus on using ecosystems to their full potential. Value

co-creation with global customers and data-based learning have to be implemented more intensively in

the future in light of this. To this end, companies must exploit the possibilities of artificial intelligence

(Verganti et al., 2020) for optimized use of existing data, which could improve learning from customers,

suppliers and other stakeholders and thus simplify scaling on a global level as well. Furthermore, even

if MNEs have already started to establish governance, they should improve its effectiveness, to, among

other things, increase trust (Vahlne & Johanson, 2021), reduce conflicts within the ecosystem

(Wareham et al., 2014), and urgently address all current and future results of the ecosystem research.

For example, rules are important, such as regulations on platform access and data protection

(Cusumano et al., 2019). In the process, MNEs need to address conflicts between improved

transferability of skills and competencies (Patriotta et al., 2013) and protection against their unwanted

outflow (Krylova et al., 2016; Sommer, 2022) particularly strongly (Contractor, 2022).

Finally, MNEs should also think about using innovation platforms as a venue for innovation

(Cusumano et al., 2019; Gawer, 2021) in innovation ecosystems (Dattée et al., 2018), particularly

because there is an increasing need for them to exploit technological opportunities beyond digital

platforms. For example, companies in the automotive industry should deal with the shift towards

technologies related to connectivity, autonomous driving, shared mobility and electrified powertrains

(CASE) (Adner & Lieberman, 2021).

7. LIMITATIONS AND CONCLUSION

This article shows that paradoxical tensions exist between the motives for entering new growth

markets (pole of internationalization) and motives for scaling back international operations for the

purpose of asset-light strategies and an increase in sustainability (pole of de-internationalization) and

these are perceived to a high degree by companies in the automotive industry. It is further shown that

digital platforms in transaction ecosystems can reduce these paradoxical tensions in IB, thereby

achieving relational rents. Since these ecosystems are just emerging in the automotive industry

analyzed in this study, no performance impact is yet apparent. However, as this impact may be possible

in the future, further research on this topic is important.

The general validity of the present study’s results is limited mainly by the fact that only companies

from the automotive industry and therefore from one sector are considered. Although paradoxical

tensions with regard to international operations were to be expected in this capital-intensive industry

Christian Festing and Heike Proff

and the elimination of effects between different industries facilitated the analysis (Miozzo & Yamin,

2012), tech companies such as Google and Apple already rely much more on platform-based

ecosystems and are largely taken into consideration in the ecosystem literature (Adner, 2021; Gawer,

2021; Jacobides et al., 2018). Apple, for example, facilitates exchanges between app providers and

users that complement one another in the Apple operating system (iOS), making it highly valued by

capital markets (Gawer & Srnicek, 2021). In capital-intensive industries, asset-light strategies are likely

to conflict not only with investments in international operations but also with the necessary investments

in new technologies (Adner & Lieberman, 2021) and the associated digital transformation (Autio et al.,

2021).

Another limitation of the study is that it was only carried out at one point in time in spring 2022.

An analysis over time (comparative static or preferably dynamic) would allow the developments of

platform effects to be examined. Thus, a dynamic consideration of the designing and aligning of

ecosystems (Dattée et al., 2018) is important. To this end, the argumentation about the

“(de-)internationalization paradox”, leading to the use of platform-based ecosystems as a mediation

solution, could be supplemented by different approaches. For example, the results could be validated

by providing direct empirical evidence with statistical data on at least two different points in time to

examine whether the number of value-adding foreign subsidiaries increases or decreases.

The study is also limited because “international operations” are considered in an undifferentiated

way. A further study should take a closer look at foreign entry modes and regions or the degree of

transnationality (Buigues et al., 2014; Cassella & Formenti, 2018) and thus a company’s “international

footprint” (Békés et al., 2021). To what extent reshoring is forced by external pressure or follows a

voluntary strategic de-internationalization, to what extent it is partial or full in a region and, if

considered dynamically, to what extent it is part of a cyclical de- and re-internationalization could also

be investigated (Kafouros et al., 2022).

However, ecosystems, like all collaboration strategies, are auxiliary strategies that support other

strategies and do not create a competitive advantage on their own. In the end, the question of whether

(automotive) companies will de-internationalize or further internationalize in the future will therefore

not be decided solely by the use of ecosystems as a conflict resolution mechanism for international

operations.

Int. Journal of Business Science and Applied Management / Business-and-Management.org

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