E-commerce Policy Environment, Digital Platform, and Internationalization of Chinese New Ventures: The Moderating Effects of Covid-19 Pandemic

Abstract

Drawing on institutional theory, this study investigates how institutional pressure can affect digital platform risk. Specifically, it examines whether two types of institutional pressure - domestic market e-commerce policy uncertainty and foreign market e-commerce policy uncertainty - affect the perceived digital platform risk for international new ventures (INVs) and its relationship with their scope of internationalization. The recent crisis caused by the Covid-19 pandemic has further impacted this new phenomenon, thus we examine its effects on the relationships between/among domestic and foreign market e-commerce policy uncertainties, digital platform risk, and the internationalization scope of INVs. We conduct four waves of a survey to test the Covid-19 effects as well as to minimize common method bias, analyzing the final sample of 394 responses from 260 Chinese INVs using structural equation modeling. The results show that domestic and foreign market e-commerce policy uncertainties positively affect the digital platform risk for INVs, with foreign market e-commerce policy uncertainty having a stronger positive impact. Moreover, we find that the Covid-19 pandemic interacts asymmetrically with the relationship between domestic vs. foreign market e-commerce policy uncertainty and the digital platform risk for INVs. In addition, the pandemic strengthens the negative relationship between digital platform risk and the internationalization scope of INVs. This research broadens and strengthens our understanding of e-commerce policy and international business in the context of INVs' internationalization.