Skip to main content
SpringerLink
Log in

Developing dynamic digital capabilities in micro-multinationals through platform ecosystems: Assessing the role of trust in algorithmic smart contracts

  • Published:
Journal of International Entrepreneurship Aims and scope Submit manuscript

Abstract

This paper develops new insights into the important role trust plays in inter-firm relationships and smart contracts in digital platform ecosystems, specifically in the context of international entrepreneurial ventures of micro-multinationals. It takes a phenomena-based research approach to assess how digital platform ecosystems provide significant advantages over traditional networked business models, and, specifically, how micro-multinationals, characterized by their limited resources, develop dynamic digital capabilities and utilize these platforms as effective vehicles for expanding businesses globally. Triangulating literature on inter-firm networks, platform ecosystems, international business, and trust, the paper demonstrates how algorithmic relationships, embedded in smart contracts, offer opportunities as well as pose challenges to participants in digital platform ecosystems. We observe that smart contracts and the evolving algorithmic relationships do introduce process efficiency, but at the same time, the question of trust and trustworthiness affects the overall effectiveness of the ecosystems. This limits the micro-multinationals from taking full advantage of technology, considering the limited resources available to them for overseas deployment. The opportunity space for smart contracts is decided by trust level and synergy in resources and processes among platform participants. This opportunity space is further moderated by the following: (a) a lack of supporting legal frameworks, (b) adaptive learning processes, (c) complexity and time-criticality of inter-organizational processes, and (d) perceived risks in inter-organizational processes. The propositions and the emergent trust framework, developed from this synthesis, provide valuable insights into how factors associated with trust and trustworthiness contribute to the adoption of smart contracts in platform ecosystems and, specifically, how these factors enable micro-multinationals to pursue internationalization opportunities.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

Data availability

The paper does not analyse or generate any datasets, because the work deals with a theoretical and conceptual approach. One can obtain the relevant materials from the references below.

Notes

  1. Biz4Afrika is the SME community portal that caters to the needs of young African entrepreneurs. The platform aims to lead with quality content on best business practices and advisory services for African SMEs across different fields. The partners provide services on a freemium model to facilitate the growth of the SMEs, empowering them to pursue business initiatives, and turning an idea into a reality, which can help their community, their country, or even the continent at large.

References

  • Akter S, McCarthy G, Sajib S, Michael K, Dwivedi YK, D’Ambra J, Shen KN (2021) Algorithmic bias in data-driven innovation in the age of AI. Int J Inf Manage 60:102387

    Article  Google Scholar 

  • Alcácer J, Cantwell J, Piscitello L (2016) Internationalization in the information age: a new era for places, firms, and international business networks? J Int Bus Stud 47(5):499–512

    Article  Google Scholar 

  • Angrish A, Craver B, Hasan M, Starly B (2018) A case study for Blockchain in manufacturing:“FabRec”: a prototype for peer-to-peer network of manufacturing nodes. Proc Manuf 26:1180–1192

    Google Scholar 

  • Arregle JL, Miller TL, Hitt MA, Beamish PW (2016) How does regional institutional complexity affect MNE internationalization? J Int Bus Stud 47(6):697–722

    Article  Google Scholar 

  • Banalieva ER, Dhanaraj C (2019) Internalization theory for the digital economy. J Int Bus Stud 50(8):1372–1387

    Article  Google Scholar 

  • Bédard, M. (2016). The underestimated economic benefits of the internet. Montreal: Montreal Economic Institute.

  • Bresciani S, Ferraris A, Del Giudice M (2018) The management of organizational ambidexterity through alliances in a new context of analysis: Internet of Things (IoT) smart city projects. Technol Forecast Soc Chang 136:331–338

    Article  Google Scholar 

  • Brouthers KD, Geisser KD, Rothlauf F (2016) Explaining the internationalization of ibusiness firms. J Int Bus Stud 47(5):513–534

    Article  Google Scholar 

  • Brouthers KD, Chen L, Li S, Shaheer N (2022) Charting new courses to enter foreign markets: conceptualization, theoretical framework, and research directions on non-traditional entry modes. J Int Bus Stud 53(9):2088–2115

    Article  Google Scholar 

  • Burrell J (2016) How the machine thinks: understanding opacity in machine learning algorithms. Big Data Soc 3(1):1–12

    Article  Google Scholar 

  • Cahen F, Borini FM (2020) International digital competence. J Int Manag 26(1):100691

    Article  Google Scholar 

  • Combs JG, Ketchen DJ Jr (1999) Explaining interfirm cooperation and performance: toward a reconciliation of predictions from the resource-based view and organizational economics. Strateg Manag J 20(9):867–888

    Article  Google Scholar 

  • Cong LW, He Z (2019) Blockchain disruption and smart contracts. Rev Financial Stud 32(5):1754–1797

    Article  Google Scholar 

  • Das A (2020) Trust in “trust-free” digital networks: how inter-firm algorithmic relationships embed the cardinal principles of value co-creation. AIS Trans Human-Comput Inter 12(4):228–252

    Article  Google Scholar 

  • Denicolai S, Zucchella A, Magnani G (2021) Internationalization, digitalization, and sustainability: Are SMEs ready? A survey on synergies and substituting effects among growth paths. Technol Forecast Soc Chang 166:120650

    Article  Google Scholar 

  • Dimitratos P, Johnson J, Slow J, Young S (2003) Micromultinationals: new types of firms for the global competitive landscape. Eur Manag J 21(2):164–174

    Article  Google Scholar 

  • Dimitratos P, Amorós JE, Etchebarne MS, Felzensztein C (2014) Micro-multinational or not? International entrepreneurship, networking and learning effects. J Bus Res 67(5):908–915

    Article  Google Scholar 

  • Du J, Williams C (2017) Innovative projects between MNE subsidiaries and local partners in China: exploring locations and inter-organizational trust. J Int Manag 23(1):16–31

    Article  Google Scholar 

  • Etemad H (2017) The emergence of online global market place and the multilayered view of international entrepreneurship. J Int Entrep 15(4):353–365

    Article  Google Scholar 

  • Etemad H (2022) The emergence of international small digital ventures (ISDVs): reaching beyond Born Globals and INVs. J Int Entrep 20(1):1–28

    Article  Google Scholar 

  • Etzioni A (2019) Cyber trust. J Bus Ethics 156(1):1–13

    Article  Google Scholar 

  • Freeman S, Edwards R, Schroder B (2006) How smaller born-global firms use networks and alliances to overcome constraints to rapid internationalization. J Int Mark 14(3):33–63

    Article  Google Scholar 

  • Gabrielsson M, Raatikainen M, Julkunen S (2022) Accelerated internationalization among inexperienced digital entrepreneurs: toward a holistic entrepreneurial decision-making model. Manag Int Rev 62(2):137–168

    Article  Google Scholar 

  • Gasser U, Almeida VA (2017) A layered model for AI governance. IEEE Internet Comput 21(6):58–62

    Article  Google Scholar 

  • Giancaspro M (2017) Is a ‘smart contract’ really a smart idea? Insights from a legal perspective. Comput Law Secur Rev 33(6):825–835

    Article  Google Scholar 

  • Glavas C, Mathews S, Bianchi C (2017) International opportunity recognition as a critical component for leveraging Internet capabilities and international market performance. J Int Entrep 15(1):1–35

    Article  Google Scholar 

  • Gulati R (1998) Alliances and networks. Strateg Manag J 19(4):293–317

    Article  Google Scholar 

  • Hannibal M, Knight G (2018) Additive manufacturing and the global factory: disruptive technologies and the location of international business. Int Bus Rev 27(6):1116–1127

    Article  Google Scholar 

  • Hawlitschek F, Notheisen B, Teubner T (2018) The limits of trust-free systems: a literature review on blockchain technology and trust in the sharing economy. Electron Commer Res Appl 29:50–63

    Article  Google Scholar 

  • Hein A, Schreieck M, Riasanow T, Setzke DS, Wiesche M, Böhm M, Krcmar H (2020) Digital platform ecosystems. Electron Mark 30:87–98

    Article  Google Scholar 

  • Herian R (2017) Blockchain and the (re)imagining of trusts jurisprudence. Strateg Chang 26(5):453–460

    Article  Google Scholar 

  • Hervé A, Schmitt C, Baldegger R (2020) Digitalization, entrepreneurial orientation and internationalization of micro-, small-and medium-sized enterprises. Technol Innov Manag Rev 10(4):5–17

    Article  Google Scholar 

  • Holm DB, Eriksson K, Johanson J (1999) Creating value through mutual commitment to business network relationships. Strateg Manag J 20(5):467–486

    Article  Google Scholar 

  • ITC, International Trade Center (2018). SME competitiveness outlook 2018: business ecosystems for the digital age. ITC, Geneva. Available online: http://www.intracen.org/SMEOutlook/. Accessed 30 July 2021.

  • Jap SD, Anderson E (2003) Safeguarding interorganizational performance and continuity under ex post opportunism. Manage Sci 49(12):1684–1701

    Article  Google Scholar 

  • Jean, R. J., & Kim, D. (2020). Internet and SMEs’ internationalization: the role of platform and website. Journal of International Management, 26(1).

  • Johnson JE, Dimitratos P (2014) What do we know about the core competencies of micromultinationals? Int J Entre 18(1):17–28

    Google Scholar 

  • Khalid S, Ali T (2017) An integrated perspective of social exchange theory and transaction cost approach on the antecedents of trust in international joint ventures. Int Bus Rev 26(3):491–501

    Article  Google Scholar 

  • Kolagar M, Reim W, Parida V, Sjödin D (2021) Digital servitization strategies for SME internationalization: the interplay between digital service maturity and ecosystem involvement. J Serv Manag 33(1):143–162

    Article  Google Scholar 

  • Lepri B, Oliver N, Letouzé E, Pentland A, Vinck P (2018) Fair, transparent, and accountable algorithmic decision-making processes. Philosophy Technol 31(4):611–627

    Article  Google Scholar 

  • Li J, Chen L, Yi J, Mao J, Liao J (2019) Ecosystem-specific advantages in international digital commerce. J Int Bus Stud 50(9):1448–1463

    Article  Google Scholar 

  • Luo Y (2021) New OLI advantages in digital globalization. Int Bus Rev 30(2):101797

    Article  Google Scholar 

  • Magnani G, Zucchella A (2019) Coping with uncertainty in the internationalisation strategy: an exploratory study on entrepreneurial firms. Int Mark Rev 36(1):131–163

    Article  Google Scholar 

  • Majocchi A, Zucchella A (2003) Internationalization and performance: findings from a set of Italian SMEs. Int Small Bus J 21(3):249–266

    Article  Google Scholar 

  • Mayer RC, Davis JH, Schoorman FD (1995) An integrative model of organizational trust. Acad Manag Rev 20(3):709–734

    Article  Google Scholar 

  • Nambisan S, Zahra SA, Luo Y (2019) Global platforms and ecosystems: implications for international business theories. J Int Bus Stud 50(9):1464–1486

    Article  Google Scholar 

  • Oviatt B, McDougall P (1994) Toward a theory of international new ventures. J Int Bus Stud 25(1):45–64

    Article  Google Scholar 

  • Parker G, Van Alstyne M, Jiang X (2017) Platform ecosystems: how developers invert the firm. MIS Q 41(1):255–266

    Article  Google Scholar 

  • Peng TA, Yen MH, Bourne M (2018) How rival partners compete based on cooperation? Long Range Plan 51(2):351–383

    Article  Google Scholar 

  • Perrons RK (2009) The open kimono: how Intel balances trust and power to maintain platform leadership. Res Policy 38(8):1300–1312

    Article  Google Scholar 

  • Rahwan I (2018) Society-in-the-loop: programming the algorithmic social contract. Ethics Info Technol 20(1):5–14

  • Ring PS, Van de Ven AH (1994) Developmental processes of cooperative interorganizational relationships. Acad Manag Rev 19:90–118

    Article  Google Scholar 

  • Ritala P (2012) Coopetition strategy – when is it successful? Empirical evidence on innovation and market performance. Br J Manag 23(3):307–324

    Google Scholar 

  • Savelyev A (2017) Contract law 2.0:‘Smart’contracts as the beginning of the end of classic contract law. Inform Commun Technol Law 26(2):116–134

    Article  Google Scholar 

  • Schilling MA, Phelps CC (2007) Interfirm collaboration networks: the impact of large-scale network structure on firm innovation. Manage Sci 53(7):1113–1126

    Article  Google Scholar 

  • Scholz LH (2017) Algorithmic Contracts Stanford Technol Law Rev 20(2):128

    Google Scholar 

  • Schoorman FD, Mayer RC, Davis JH (2007) An integrative model of organizational trust: past, present, and future. Acad Manag Rev 32(2):344–354

    Article  Google Scholar 

  • Seidel MDL (2018) Questioning centralized organizations in a time of distributed trust. J Manag Inq 27(1):40–44

    Article  Google Scholar 

  • Seppänen R, Blomqvist K, Sundqvist S (2007) Measuring inter-organizational trust—a critical review of the empirical research in 1990–2003. Ind Mark Manage 36(2):249–265

    Article  Google Scholar 

  • Shaheer NA, Li S (2020) The CAGE around cyberspace? How digital innovations internationalize in a virtual world. J Bus Ventur 35(1):105892

    Article  Google Scholar 

  • Shermin V (2017) Disrupting governance with blockchains and smart contracts. Strateg Chang 26(5):499–509

    Article  Google Scholar 

  • Squire B, Cousins PD, Brown S (2009) Cooperation and knowledge transfer within buyer–supplier relationships: the moderating properties of trust, relationship duration and supplier performance. Br J Manag 20(4):461–477

    Article  Google Scholar 

  • Steinhäuser VPS, Paula FDO, de Macedo-Soares TDLVA (2021) Internationalization of SMEs: a systematic review of 20 years of research. J Int Entrep 19(2):164–195

    Article  Google Scholar 

  • Stoian MC, Dimitratos P, Plakoyiannaki E (2018) SME internationalization beyond exporting: a knowledge-based perspective across managers and advisers. J World Bus 53(5):768–779

    Article  Google Scholar 

  • Strange R, Zucchella A (2017) Industry 4.0, global value chains and international business. Multinational Business Rev 25(3):174–184

    Article  Google Scholar 

  • Vanninen H, Kuivalainen O, Ciravegna L (2017) Rapid multinationalization: propositions for studying born micromultinationals. Int Bus Rev 26(2):365–379

    Article  Google Scholar 

  • Verma R, Gustafsson A, Kristensson P, Witell L (2012) Customer co-creation in service innovation: a matter of communication? J Serv Manag 23(3):311–327

    Article  Google Scholar 

  • Von Krogh G, Rossi-Lamastra C, Haefliger S (2012) Phenomenon-based research in management and organisation science: when is it rigorous and does it matter? Long Range Plan 45(4):277–298

    Article  Google Scholar 

  • Wang L, Yeung JHY, Zhang M (2011) The impact of trust and contract on innovation performance: the moderating role of environmental uncertainty. Int J Prod Econ 134(1):114–122

    Article  Google Scholar 

  • Wang Y, Singgih M, Wang J, Rit M (2019) Making sense of blockchain technology: how will it transform supply chains? Int J Prod Econ 211:221–236

    Article  Google Scholar 

  • Werbach K, Cornell N (2017) Contracts ex machina. Duke Law J 67:313

    Google Scholar 

  • Yonatany M (2017) Platforms, ecosystems, and the internationalization of highly digitized organizations. J Organ Des 6(1):2

    Google Scholar 

  • Zeng J, Khan Z, De Silva M (2019) The emergence of multi-sided platform MNEs: internalization theory and networks. Int Bus Rev 28(6):101598

    Article  Google Scholar 

  • Zhang Y, Kasahara S, Shen Y, Jiang X, Wan J (2018) Smart contract-based access control for the internet of things. IEEE Internet Things J 6(2):1594–1605

    Article  Google Scholar 

  • Zhao Y, Von Delft S, Morgan-Thomas A, Buck T (2019) The evolution of platform business models: exploring competitive battles in the world of platforms. Long Range Plan 53(4):101892

    Article  Google Scholar 

  • Zia, A., Kauffman, S. Niiranen, S. (2012). Complexity and philosophy: the prospects and limits of algorithms in simulating creative decision making. Emergence: Complexity and Organization, 14(3), 89

Download references

Author information

Authors and Affiliations

  1. S.P. Jain Institute of Management & Research (SPJIMR), Mumbai, 400058, India

    Arindam Das

Authors
  1. Arindam Das
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Arindam Das.

Additional information

Publisher's note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Das, A. Developing dynamic digital capabilities in micro-multinationals through platform ecosystems: Assessing the role of trust in algorithmic smart contracts. J Int Entrep 21, 157–179 (2023). https://doi.org/10.1007/s10843-023-00332-7

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10843-023-00332-7

Keywords

Search

Navigation