Abstract
Network externalities have important implications for rapidly expanding platforms' overseas footprints. However, less attention has been paid to the impact of between-platform competitive dynamics created by network externalities on a firm's internationalization strategy. In this study, we investigate these dynamics by analyzing how focal platforms respond to the intense competition in the platform market in a way we call “passive internationalization". We draw on the attention-based view (ABV) to predict that executives may turn their strategic focus to exploring new markets abroad when large peer platforms leverage network externalities to launch aggressive competitive actions. Using longitudinal data on 253 digital platform firms in China from 2010 to 2021, we find that large peer platforms’ competitive intensity is positively related to outward foreign direct investment (OFDI) by the focal platform, and CEOs from outside the firm and international alliance partners acting as attention carriers positively moderate such relationship. Our research provides an important contribution to the literature on platform strategy and the ABV in the international business contexts.