Internationalization of Digital Firms: Overcoming Costs and Challenges

Abstract: Digital firms are becoming increasingly important actors in the business environment and society. Commonly, digital firms have been argued to have particularly good o pportunities to internationalize due to their unique characteristics. However, researchers have recently acknowledged and emphasized the challenges and costs digital firms face when internationalizing. Though, a discrepancy between digital firms’ internal facilitators of internationalization, and the challenges and costs digital firms face when internationalizing, exists in the academic literature. This explorative qualitative research study sets out to fill this gap by attempting to answer how digital firms , in light of the associated challenges and can facilitate successful internationalization. Findings reveal that digital firms can facilitate successful internationalization through integration with local users, local institutions, and online com plementors. Their ability to integrate with local use rs, local institutions, and online complementors were indicated to depend on their Dynamic Capabilities, involving Knowledge Capability Updating and Adaptive Capability.