Boots on the ground: Foreign direct investment by born digital firms

Research Summary Recent global strategy research on born digital firms (i.e., with products distributed through channels) has paid only limited attention to the role of foreign direct investment (FDI) in internationalization such firms. We argue that exploiting technologies requires a range complementary, non-digital resources. Born digitals typically deploy FDI when large cultural and geographic distances limit fungibility scalability complementary resources, leading positive relationship between distance (cultural geographic) FDI. The effect is moderated by business model type. Using sample US-based over 800 FDIs, we find support for our hypotheses contribute an important empirical baseline recent discussions digitalization strategy. Managerial Companies selling (e.g., software, cloud-based services) are theoretically able offer their markets internet-based channels, without ever setting foot country. And yet, many “born digital” establish physical presence undertaking (FDI). This phenomenon remains insufficiently explained. can supply resources help exploit monetize assets markets. data from projects, show more likely occur if market far away or culturally very different company's home country, strength this differs among B2C B2B models.