The role of cross-border E-commerce platforms in the digital economy: empower firms to gain global market insights to increase global competitiveness

Abstract

Abstract With the rapid development of the digital economy, cross-border e-commerce platforms provide unprecedented opportunities for firms, particularly small businesses, to expand their business to global markets. While these platforms create tremendous competition for sellers, they also provide a unique platform to empower sellers to gain market insights without physically entering different international markets. This paper focuses on how sellers’ network positions within cross-border e-commerce platforms affect their performance. Specifically, by aggregating thousands of sellers’ and buyers’ transaction data, these digital platforms own massive data on the complex buyer–seller social networks in which sellers can connect with one another through common buyers with whom they have traded. Based on a proprietary dataset from a leading Chinese cross-border e-commerce platform, this study shows how brokerage and closure positions in sellers’ networks influence performance, how such impacts vary in developed versus emerging markets, and how they were affected by macroeconomic shocks such as the global financial crisis. Our research provides important implications for firms going global in the digital economy age and on the critical role of digital platforms in empowering small businesses.

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