Internationalization pathways of sharing economy companies

Within the literature there are various terms used to describe the process of internationalization, such as pathways and trajectories. Although these terms are often used interchangeably both in the extant literature and in practice, in this study we use the term pathway. Moreover, we share the view of Kontinen and Ojala (2012) who use the term pathway to refer to the strategies used, which can consist of several phases or stages during which a firm follows or shows a certain behavioral pattern related to its internationalization.

The pathway of the firm is often distinguished by scholars in terms of three dimensions: time, scale, and scope (e.g., Kontinen & Ojala 2012; Kuivalainen et al. 2012a). The measure of time has typically been examined concerning two aspects: rapidity and pace of firm internationalization. The prior refers to the time lag between the firm’s founding and the commencement of its internationalization, while the latter relates to the speed of the firm’s subsequent international growth and development (Kontinen & Ojala 2012). The scale of internationalization relates to the extent of a firm’s operations in a foreign market. This is often discussed in terms of shallow or deep market penetration, and typically measured in terms of resource commitment. And scope is viewed in relation to the number of countries a firm operates in, or rather its global reach, frequently discussed in the literature as narrow or broad geographic scope (Kuivalainen et al. 2012b).

The traditional internationalization pathway depicted within international business literature is the gradual approach, developed based on the MNC. It is considered to be a cumulative, path-dependent process whereby a firm’s international expansion pattern is a function of its past international experience and knowledge base (Johanson & Wiedersheim-Paul 1975). Most notably referenced by the Uppsala model (Johanson & Vahlne 1977, 1990), the firm goes through sequential internationalization stages, where the potential benefits of exploiting firm-specific advantage abroad need to be weighed against the risks of operating in unknown foreign environments and the costs of learning to do business there (i.e., liabilities of foreignness). In contrast, international entrepreneurship literature introduces the accelerated approach undertaken by small, innovative firms such as international new ventures (Oviatt and McDougall 1994) and born globals (Knight & Cavusgil 1996). Such firms are generally considered to be knowledge-intensive firms that from inception appear to disregard their domestic markets in favor of the international marketplace (Young et al. 2003), often because the domestic market is perceived to lack potential. Instead, they seek to “derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries” (Oviatt and McDougall 1994, p. 49).

Regarding time of internationalization, the gradual approach sees foreign market entry start at a later stage in the firm's lifecycle, once experiential knowledge has been built up and perceived risks reduced. While there are varying viewpoints, it is widely accepted that internationalization via the accelerated route begins from, or near founding, typically within three years (Romanello & Chiarvesio 2019). This is due to the firm’s foreign resources and sales dependency (Oviatt & Mcdougall 1994). Timing of subsequent market entries is also fast and intense.

Scale is the primary objective of the gradual pathway (Hashai 2011), commencing with sales within the home market and irregular exports, followed by regular export via agents and subsequently by the establishment of sales subsidiaries. At a later stage, the firm invests equity in offshore production sites (Hashai & Almor 2004). Meanwhile, firms pursuing the accelerated route, are often characterized by a high foreign sales to total sales ratio (Kuivalainen et al. 2012b; Romanello & Chiarvesio 2019). Reliant on international networks and strategic alliances to compensate for resource deficiencies, the firm internationalizes via multiple collaborative modes, primarily using exports via agents or distributors (Knight & Cavusgil 1996). In doing so, it can overcome liabilities of smallness, newness, and foreignness which it is prone to face (Etemad 2022).

The principal intent of small entrepreneurial firms such as born globals is to achieve a broad scope of internationalization (Hashai 2011). Perceiving the world as one marketplace (Young et al 2003), and less influenced by psychic distance, they move quickly into culturally and geographically proximate and non-proximate markets (Olejnik & Swoboda 2012). While Contrastly, for the traditional firm, international operations begin through market concentration, with a narrow geographic scope. The firm then moves into markets which are close to the domestic market in terms of psychic and geographic distance before gradually expanding into more distant markets (Johanson & Vahlne 1977).

Despite some disputation, for example, Hashai and Almor (2004) and Hashai (2011) who argue that the born global often purses a gradual pathway, yet at an accelerated pace, and Olejnik and Swoboda (2012) who propose that the firm can change its path at various stages of its internationalization, the mainstream view remains that the firm prioritizes either scale or scope (Hashai 2011). Yet, sharecoms challenge this notion by leveraging their flexible and dynamic business models to adopt pathways incorporating both, and do so from early on.

Digital technologies have significant implications for international business, with digital firm types bringing into question the applicability of existing internationalization theories (Chen et al. 2019; Etemad 2022; Cha et al. 2023). In their scrutinization of the Uppsala model and its possible fit for born digitals, Monaghan et al. (2020) emphasize where certain assumptions fit, and others do not. For example, they posit that arguments regarding network relationships can accommodate the born digital, if they extend to include network effects. While Yet they claim that slow-paced mechanisms such as experiential learning are not applicable given the born digital’s ability to engage directly with end-users, leverage automation, and create network effects. This leads to internationalization which is typically more time-compressed, much broader in scope, and with much less of a physical footprint. Monaghan et al. (2020) conclude that no one theory or set of arguments suffices in fully explaining the internationalization of the firm. When looking at arguments pertaining to the internationalization of firms such as born globals, some similarities with born digitals can be found, e.g., potential to internationalize early and rapidly. Yet, a notable difference lies in the born digital’s heavy reliance on digital technologies which can be leveraged for cost savings and reduced liabilities when internationalizing. Being digital and cost-effective affords the opportunity to be strategically experimental in their approach (Vadana et al. 2021).

Operating in the digital arena and utilizing advanced digital technologies significantly reduces many internationalization-related barriers (Stallkamp & Schotter 2019; Cumming et al. 2023; Etemad 2023). Building experiential knowledge is no longer deemed a prerequisite for international expansion (Nambisan et al. 2019; Monaghan et al. 2020; Etemad 2022). Instead, the sharecom can harness the local knowledge and experience of its partners to soften the liabilities of foreignness (Brouthers et al. 2016; Thornton & Zhao, 2024) and reduce associated time and costs (Marano et al. 2020). The sharecom enters specific markets based on the perceived potential to build network effects quickly and with relative ease (e.g., large and/or densely populated markets) (Chen et al. 2019), with psychic distance somewhat of a non-issue (Parente et al. 2018; Ochieng et al. 2024).

Similarly, the sharecom can overcome liabilities that international entrepreneurial firms are prone to (i.e., smallness, newness) through means of rapid reputation building online and by utilizing the individual users (Chen et al. 2019). And through collective interaction, the sharecom’s users can co-create the internationalization process in a continuous, ongoing fashion, with a community of geographically dispersed users whose interactions draw new adopters from global markets (Coviello et al. 2017; Cha et al. 2023).

The sharecom can make its platform accessible to a wide audience, with low transaction costs and limited capacity constraints (Blagoeva et al. 2020; Thornton 2024). As such, it can become instantaneously international (Brouthers et al. 2016), attaining a broad geographic scope (Cha et al. 2023). Through passive internationalization, the sharecom can open its existing platform to users anywhere in the world without adaptation (Stallkamp & Schotter 2019; Thornton et al. 2019). Here, the users play a central role in when and where foreign market entry occurs (Chen et al. 2019), with geographic boundaries diminishing (da Fonseca et al. 2023).

The sharecom may also engage in more active internationalization permitting it to scale within selected countries. It does this by targeting specific markets through platform adaptation, e.g., translating platform content into local languages (Marano et al. 2020; Thornton et al. 2019), changing payment methods, and tailoring service offerings to suit local user preferences (Cha et al. 2023). The sharecom may also establish a physical local presence using various entry modes, ranging in level of commitment, e.g., intermediaries (da Fonseca et al. 2023), partnerships with local firms, small satellite offices, and/or mergers and acquisitions (Brouthers et al. 2016; Marano et al. 2020; Parente et al. 2018; Stallkamp & Schotter 2019).

We adopted a qualitative multi-case study approach (Eisenhardt 1989; 2021), deemed suitable owing to the significance of the research question and the inability of the extant theory to adequately address it (Nielsen et al. 2020). Moreover, it was considered appropriate for answering the how question (Ghauri 2004) about the sharecoms’ internationalization. Case studies are considered to be a valuable approach when analyzing new phenomena, thus fitting for the internationalization of sharecoms. Using multiple cases allows for the production of theoretical constructs and midrange theory from case-based empirical evidence derived from recursive cycling among the case data, emerging theory, and later, extant literature (Eisenhardt 1989).

We used theoretical sampling to select cases likely to extend emergent theory (Eisenhardt 1989), affording flexibility to increase our sample size and test developing analytical generalizations (Yin 2013). We selected cases from a population of sharecoms possessing the key features presented within this study (i.e., digital platform-based, P2P, asset-light), and active in at least one foreign market. The sample was not random but reflected the selection of specific cases to extend the theory to a broad range of sharecoms (Eisenhardt 1989). We purposefully selected sharecoms diverse in terms of age, size, and industry, ensuring maximum variation. Moreover, to increase generalizability, sharecoms from multiple countries were included, differing in terms of, e.g., size, culture, and language. See Table 2 for an overview of all cases included in the study.

Sharecoms were sourced through a combination of online databases such as CrunchBase (the world’s leading database of private technology firms) and sharing economy directories (e.g., justpark.com’s comprehensive compiled list of sharecoms by country and industry), and through the use of search engine keywords such as “sharing economy” and “digital platforms”. A total of 51 sharecoms fitted our criteria and thus were considered suitable for the study.

In early September 2018, sharecoms were contacted, mostly via email or business networking site, LinkedIn. This resulted in 12 sharecoms responding positively to our request for participation. Derived from theoretical saturation, the number of cases is deemed fitting for theory building from case studies (Eisenhardt 1989, 2021). Between September 2018 and July 2019, interviews were held with a total of 13 respondents. These included founders, chief executive officers, chief marketing officers, managing directors, and heads of business development. In all but one case, one respondent per sharecom was interviewed. This was deemed sufficient since all our interviews were with high-level personnel possessing both the strategic and operational knowledge required to answer questions about the sharecom’s internationalization (Ghauri 2004).

Using a multi-source approach, we collected data through various means (Eisenhardt 1989). Semi-structured interviews were conducted. Reflective of society’s ever-increasing adoption of new technologies (Nielsen et al. 2020), and in keeping with how sharecoms conduct their daily business, interviews were carried out digitally via video call. With the consent of the respondents the interviews were recorded. Notes were also taken during the interviews. The interviews were then transcribed and the transcripts were sent to the respondents for validation.

An interview guide was developed to aid the interviews. Questions were kept open and flexible to inspire respondents to elaborate on their experiences without any restraints and allow them to fully reflect on the sharecoms’ path to internationalization. To begin with, respondents were provided with a brief description of the research project and definitions of the key constructs. Thereafter questions were asked about the following: (1) timing of the sharecom’s initial and subsequent foreign market expansion; (2) extent of internationalization; (3) market selection; and (4) entry modes.

To complement our primary data, we collected various types of secondary data afforded by a plethora of information available on the Internet (Nielsen et al. 2020). Between May 2018 and May 2020 data was gathered on the twelve sharecoms, comprising both internal sources (e.g., sharecoms’ websites and social media accounts) and external sources (e.g., press articles, media coverage). Collectively, this amounted to approximately 100 pages, which combined with the interview data (transcripts and notes) resulted in about 350 pages of raw data to be applied in the overall interpretation and theory development process (see Table 3 for data collection details).

We compared the interview data with the secondary data, and any discrepancies were clarified with the respondents. By examining the data obtained from multiple sources, we were able to triangulate, ensure the validity of our data, and substantiate constructs, thus increasing the reliability and robustness of our research findings (Eisenhardt 1989; Yin 2013).

We began to analyze our data in parallel to our data collection. We first carried out a within-case analysis which permitted familiarity with each case in its own right and allowed for unique patterns of each case to emerge (Eisenhardt 1989). Using all data sources, we prepared twelve case studies, applying systematic presentation to enable methodical analysis and enhance understanding. Case narratives were developed and information was further displayed in a series of tables.

A rigorous and systematic process followed where we coded our data using a combination approach (Ghauri 2004). Using predetermined codes from the literature which we presented in our theoretical framework, we coded the sharecoms internationalization. We used the internationalization dimensions: time, scale, and scope. For example, an interviewee said, “We internationalized pretty much from day one,” and we coded this as “rapid internationalization” and consequently categorized it as “time” of internationalization. The statement, “We entered many countries across Europe and Asia, as well as North and South America,” was coded as “broad geographic spread” and thus categorized as “scope”. We also coded the data in terms of active and passive internationalization. For example, when an interviewee explained, “We do our homework and know where we want to go. We then focus on those particular markets,” we coded that as “active” internationalization, and the statement “Our platform is available to all, so anyone, anywhere can join,” was coded as “passive” internationalization. During the data-coding stage, we used tables for both presentation and analysis purposes.

Next, we performed a comparative, cross-case analysis to further validate our findings (Yin 2013) and seek generalizable patterns (Eisenhardt 1989). In doing so, we were able to illustrate the sharecoms’ internationalization pathway and build our conceptual framework. We compared the cases using the aforementioned codes. Indexing our responses, we used these to create tables and search for similarities and differences (Eisenhardt 1989; Ghauri 2004). Patterns started to emerge, resulting in the identification of three prominent internationalization pathway patterns: Maximizer, Optimizer, and Penetrator.

The Maximizer refers to sharecoms found to be fully utilizing both active and passive internationalization to pursue simultaneous scale and scope. Statements such as “We go after certain markets, markets that are of particular appeal because of their demographic but at the same time our platform is open, so we monitor where we are gaining traction and act on that too,” would be coded as “Maximizer”. The Optimizer refers to sharecoms that also use a hybrid approach to achieve scale and scope, yet are less responsive regarding passive internationalization. For example, an interviewee said, “We have key markets that we are focusing on,” and they also explained, “We do see users joining the platform from certain countries and that’s great but right now we are not doing much about it, its not our priority just now”. We coded this as “Optimizer”. Lastly, the Penetrator engages only in active internationalization. When an interviewee told us, “Right now the platform is only available in the markets we are building in. We’ve had interest from other countries but it’s not the right time for us to look into that”, we coded that as “Penetrator”.

Through an iterative process, we continuously compared the emerging theory with our empirical findings and the extant literature to build empirically valid theory (Eisenhardt 1989; 2021; Yin 2013). From the empirical findings, a theoretical model was developed. In the following section, we present our results, illustrated by the empirical case evidence, and further summarized in a complementary construct table (see Table 4).

The sharecom makes its platform open and accessible, meaning that users anywhere in the world can access it, and this paves the way for passive user-led internationalization. The co-founder of boat-sharing platform BoatAffair highlights the ease and benefit of combining passive and active internationalization:

What we offer works better being international, and we can go international because it doesn’t cost us a penny. Somebody from Australia lists, as opposed to someone from Switzerland lists, it’s the same for us, they can list from anywhere. Umm… but we do, you know, we do have to come with a certain strategy as well in terms of acquisition. So, we do go after a few select countries more strategically.

With the pattern, once the platform is open, the sharecom then actively monitors traction and responds swiftly to exploit the full potential. for exmaple, the MD of host-present accommodation sharecom HomeStay explains:

In terms of where we focus, we have key markets and then we also have…well, organically we see them [users] coming from everywhere and anywhere and we obviously hone in on markets where we’re seeing the demand and meet it with supply.

Responsive action can vary from translating the platform into new languages (HomeStay, OLIO), adding new features (BoatAffair), localizing features (OLIO), and establishing a physical presence in a market (MamazSocialFood). In the case of food-sharing sharecom OLIO, its app was available to download within the first few months of founding, however, the number of international downloads quickly grew along with requests from frustrated users who were unable to use the app. The sharecom responded to this quickly with the introduction of an “open source” strategy to maximize scale and growth potential, which resulted in the sharecom being able to expand instantaneously into an additional 35 countries, worldwide.

As for MamazSocialFood, the social, home-dining sharecom started gaining sizeable traction in the U.S. and acted quickly to exploit the situation. The co-founder stated:

Americans started visiting France and then after that, they started registering on the platform. They are now like our main market. We decided to make a move on it and will open up an office in Los Angeles.

In parallel, sharecoms pursue active internationalization by targeting specific markets or a group of markets that are entered simultaneously or within quick succession. We refer to such groups as “clusters”, which may or may not be physically proximate to each other and/or the sharecoms home market. Rather they are formed based on various criteria, such as language, population size and/or density, industry appeal, or based on openness to embrace the sharing economy concept in general. For example, travel experiences sharecom WithLocals focuses on two main geographic-based “clusters”, strategically targeting markets that are popular destinations with travelers. The CEO explains:

We operate in mainly Europe and Asia, and in Europe it's all the major cities. Not all of them but like Paris, Rome, Barcelona, London, the big ones, we are there. Since this year we are expanding into cities that are a little bit smaller, like in Italy, we were already in Rome, but like Milan, Florence, Venice, Naples, so five cities already. And in Asia, it's mainly southeast Asia, so Bangkok, Kuala Lumpur, Hong Kong, Taipei… the core reason to go to a specific new city is the amount of travelers that are going there.

Whereas HomeStay started out targeting an English-speaking cluster, as their primary users are English-language-learning students. Both HomeStay and WithLocals describe taking a city rather than country approach when internationalizing, rolling out initially in multiple capital cities in target countries, before targeting other cities in subsequent rounds of internationalization. HomeStay’s MD elaborates:

To give an example, in the UK, it's not just London which is an interesting one. Tier 2 cities are also important. Actually, in a lot of countries, these Tier 2 cities are, you know, attractive locations. Cities that have university centers or maybe manufacturing areas, or hospitals… these wouldn't necessarily always be the capital city. So, we look first at the big ones, the capital cities but then after this, it is onto the Tier 2s.

In the case of BoatAffair, the sharecom's target cluster is Latin America, which the co-founder considers to be a whole ecosystem on its own and one that has a lot of traffic.

The sharecom enables passive internationalization by making its platform accessible, often by means of translating or setting up in a universal language. In the case of Norwegian ride-sharing platform Haxi, the co-founder states:

We actually made it, translated it [the app] into English before Norwegian, and then becoming international was pretty fast. I think it was only four or five months until we got users from other countries.

The sharecom’s “follow up” action is somewhat limited, for example, it may translate the platform into an additional language if there has been sizeable traction in a particular country, as in the case of Haxi who translated their app into Spanish after user groups in Spain and Chile started to emerge. Yet, generally speaking, user-led passive expansion is not pursued, as indicated in the case of delivery sharecom Nimber. The founder notes:

Theoretically, our platform is open in all markets. We have users in Denmark, we have users in Sweden, but we haven't really pushed it there at all. So, they aren't what we think of right now as our markets as such. I mean, we don’t have a team on the ground there, we aren’t actively onboarding bringers, we aren’t marketing, or actively building a community of users.

Meanwhile, the CMO of pet and house-sitting sharecom TrustedHousesitters states:

We're seeing a lot of uptake from various markets, for example, Brazil, and we could definitely do more there… reach them better if we translated our website but one step at a time, for now, our focus is really on English-speaking countries like the U.S.

Concurrent with its passive internationalization, the sharecom actively goes after certain markets either in small clusters or singly, doing so at a moderate pace. For example, Norwegian sharecom Haxi’s main focus is other Scandinavian countries, which it targets collectively. While Nimber concentrates its resources exclusively on internationalization in the UK market, which it pursues quite intensely.

Market selection can be driven by different factors, from geographic and cultural proximity (e.g., Haxi, TrustedHousesitters), to legal and/or institutional frameworks (e.g., Haxi), and market size and potential (e.g., Nimber). Asked about the decision to enter the UK from the sharecom’s home market of Norway, Nimber’s founder explains:

Why the UK? Good question, well mostly it was because we wanted to be able to grow our business faster in a bigger marketplace. I think, you know, that’s normally the case. We wanted to be based somewhere which had a bigger ecosystem.

While the sharecom’s geographic spread can be vast, due to both passive and active internationalization, the extent of operations is more significant in the markets that have been specifically targeted.

Reasons for not opening up to passive internationalization pertain to the sharecom wanting to focus on developing and testing its business model in its home market or chosen international market(s) before engaging in further cross-border expansion. The co-founder of Irish clothes-sharing platform Nuw. informs about turning down requests from the U.S. despite recognizing the potential that the market has:

We’ve had some people just write to us that are in San Francisco saying that they’re really interested, but we feel we need to have our blueprint first, then we can go anywhere.

Instead, the Penetrator sees the sharecom pursue a purely active internationalization pathway, doing so typically within the first year of founding. The sharecom targets specific markets, one at a time, albeit in relatively quick succession. Moreover, it starts by entering a geographically close market that possesses more potential to test the model. For example, Nuw. and HouseMyDog moved into the UK from their home markets of Ireland, within the first year of operating. Swedish boat-mooring sharecom Mooringo moved into neighboring Norway after one year, following the sailing behavior of users who sail along the coast. In the case of shared parking spaces platform ParkPnP, the CMO explains their decision to enter the Netherlands and Belgium:

We launched in the Netherlands and Belgium and did so pretty close together. For us, when we looked at the situation and actually ran the numbers on it and ran the models, ultimately, where the biggest opportunity for us was, was mainland Europe. Then we thought, well Belgium is obviously a very good test round for France and the Netherlands is a very good test round for Germany, so let's try there and that will enable us to scale up further in the larger markets.

Through active internationalization, the sharecom penetrates the market more deeply in a bid to reach a critical mass of users. It focuses its resources on platform adaptation, establishing a physical presence, or a combination of both. HouseMyDog, Mooringo, and ParkPnP all translated their platforms into new languages and localized certain features to better serve target markets. Various entry modes are adopted, from using local agents (Mooringo) and establishing licensing deals (ParkPnP), to mergers and acquisitions (HouseMyDog, ParkPnP) and setting up local offices (HouseMyDog, Nuw.). Mooringo’s founder explains:

Our app is prepared in English. It’s made in English but also we have local agents and they will translate the app into the local language. They have local knowledge and they can educate me, tell me what we need in the market, and then we can adapt.

With this pattern, the sharecom targets specific cities, entering a major city within a certain country and then expanding further within that country. The co-founder of dog-sitting sharecom HouseMyDog elaborates on this point and describes their strategy when selecting new cities:

We find that a city-by-city approach is much more efficient, obviously because growing takes a lot of time and costs a lot of money. We kind of felt that if you try to scale it to lots of cities at the same time, it can be very difficult because you don't ever get any real penetration in one city. And you're spending loads of money, obviously, your acquisition costs are quite high when you go into new locations. So, what we find, is, you know, we get to a certain level of revenue in one location and then move to the next.

In the case of Nuw., the sharecom first entered England by building a local community in the capital city (London), and after that it started to spread out, setting up in the city of Cambridge.

Our study has several implications for scholarship on sharecom internationalization. Within internationalization literature, the firm’s internationalization pathway is mostly discussed in terms of a gradual (e.g., Johanson & Vahlne 1977, 1990, 2009; Johanson & Wiedersheim-Paul 1975) or accelerated approach (e.g., Knight & Cavusgil 1996; Oviatt & McDougall 1994), within the international business and international entrepreneurship fields, respectively. Much of the extant literature argues that the firm adopts “either or”, sticking to one pathway primarily because of the perceived risk and resource commitment involved in changing or combining paths (Coviello et al. 2017; Hashai 2011). However, we posit that the sharecom’s internationalization challenges such notions.

In line with Hashai and Almor (2004) and Hashai (2011), we propose that the sharecom’s internationalization is not so black and white. Rather, while it may exhibit elements of the established pathways there are some nuances, often triggered by a difference in motives. For example, the sharecom may expand into new foreign markets incrementally but at a faster pace. Or it may internationalize from inception while simultaneously exploiting home market potential, conflicting with the motives of firms pursuing the accelerated route, such as international new ventures and born globals. Furthermore, our study reveals that sharecoms recognize the importance of strategizing when it comes to internationalization, and implement this into their decision-making from early on. This contradicts Monaghan et al (2020) who suggest that being strategic about internationalization is often less evident among born digital firms and arguably less of a concern.

The sharecom’s core value offering lies in its ability to create network effects, the pursuit of which is a key driver of internationalization (Parente et al. 2018; Cha et al. 2023). As such, we argue that it is advantageous, and even somewhat of a necessity, for the sharecom to exploit all possible avenues. Our data suggests that the sharecom has the ability to forge hybrid pathways; a notion that contradicts existing arguments within the internationalization literature (Hashai 2011). This is owing to its use of digital technologies, which affords flexibility and significantly reduced costs.

Contrary to views commonly held within the literature, our data shows that the sharecom can pursue simultaneous scale and scope without risk or heavy resource commitment. To a great extent, this is because value-adding activities are externalized (Parker et al. 2017) and thus liabilities of internationalization are offset by the individual users and user networks (Etemad 2022). This, in turn, paves the way for novel pathways which existing firm-centric and business network approach theory can not fully explain (Brouthers et al. 2016; Coviello et al. 2017).

Passive internationalization enables the sharecom to internationalize from the outset and achieve a broad geographic scope (Cha et al. 2023). Adoption can come from countries close in cultural and physical proximity as well as those more distant, and can range from highly predictable (e.g., a boat-sharing platform will likely gain traction in countries with a large boating population), to less predictable or even surprising. This, in turn, can benefit the sharecom by exposing it to otherwise overlooked markets (Chen et al. 2019). While passive internationalization is user-led, it is a part of the sharecom’s strategic plan, contrary to what the literature implies (e.g., Monaghan et al. 2020).

The extent of the uptake in each market is determined by the users. This can result in a small number of users amassing in numerous countries, but a critical mass in only a few. Brouthers et al. (2016) posit that users joining the platform is merely the first step, with value coming from engagement. With the Maximizer the sharecom not only makes its platform open, it actively monitors and swiftly responds to user-led traction to ensure network effects develop and thus value is generated. Responses can be significant, for example, transforming multiple aspects of the platform to enhance the user experience, or setting up a local office to help grow the user base.

The Optimizer employs the same principles as the Maximizer (i.e., simultaneous scope and scale through a hybrid strategy of passive and active international expansion), yet differs in that it provides limited response to user-led internationalization. Priority consideration is given to target markets, with limited resources allocated to passive markets. Furthermore, differences occur in the approach to selecting target markets and the pace at which those markets are entered, the Optimizer sees the sharecom target smaller clusters, doing so at a slower pace.

In contrast to the Maximizer and Optimizer, the Penetrator sees the sharecom engage in purely active internationalization. Here, the focus is on scaling operations within targeted single markets, often starting with a nearby country. To this end there is alignment with the more traditional internationalization process theories, however, contrary to such theory, internationalization starts early, typically within the first year. The motive for early internationalization is similar to that of international entrepreneurial firms such as the born global, i.e., limited potential in the home market (Knight & Cavusgil 1996), which typically sees the sharecom go into a larger and/or more densely populated market. Yet, while such firms pursue rapid foreign sales in multiple markets, the sharecom’s primary focus is on testing its model, before expanding further, one market at a time.

The Penetrator sees the sharecom enter new foreign markets by focusing its resources on building up localized user networks and communities (Cha et al. 2023; Thornton & Zhao, 2024). By forging partnerships and engaging with complementors, the sharecom can harness knowledge and experience to help strengthen its position (Brouthers et al. 2016) and alleviate the risk and cost associated with internationalizing (Parente et al. 2018). Sharecoms use various entry mode, mostly ranging from moderate (e.g., setting up a local office) to higher commitment (e.g., acquisition).

While we identify and describe three patterns, we posit that these are not fixed, rather they represent a strategic approach taken during a particular stage of the sharecom's internationalization. While conflicting with the popular view within the internationalization literature (Coviello et al. 2017), it supports the findings of Olejnik and Swoboda (2012) who state that firms change pathways within their lifecycle. Our data indicates that the sharecom can switch patterns with minimal perceived restrictions, and we elicit that the likelihood of doing so is relatively high for some sharecoms. For example, based on our interviews, it was clear that sharecoms currently pursuing the Optimizer pattern of internationalization realize the potential in the markets they have passively entered but are hindered from acting upon this due to limited resources. Thus, it is probable that as the sharecoms grow and expand their team, or close their next funding round, they will ramp up their responses by switching to the Maximizer. For sharecoms currently following the Penetrator path it is likely they will switch to either the Optimizer or Maximizer at some point. The reason for targeting a single market is to build and test the model that can then be rolled out further. This stage is not only critical to the development of the business model but also resource-intensive. It often involves entering multiple markets, one after the other, hence being a sole focus for the sharecom. We posit that once this stage is complete, not only will the sharecom have a viable model to internationalize but it will be able to reallocation resources previously tied up in the development stage.

In addition, there are several practical implications, and our analysis suggests that founders/managers seeking to internationalize may consider the following. Prepare for early internationalization, either from inception or near after. In doing so, sharecoms can reach new markets before international and local competitors, and acquire new users. Sharecoms from a small home market and/or those with limited potential can also benefit from moving fast to test the business model.

Make the sharecom’s platform open and available. This can be done by opening up the domestic platform, allowing users worldwide to join. This requires little or no adaptation. Although, from our interviews, it was apparent that making the platform available in English from the outset increased ease of access and use, owing to the language’s global use. This strategy can see a broad geographic spread and rapid uptake of users.

Simultaneously, sharecoms can direct their resources into targeting specific markets, singly or in clusters. By establishing local communities and developing partnerships with complementary providers, the sharecom can tap into a wealth of resources, experience, and knowledge, which in turn can help accelerate the process, reduce costs, and soften internationalization-related challenges and barriers. In doing so, the sharecom can build actively engaged and sizeable user networks in multiple countries.

We acknowledge that limitations may lie in the generalizability of our findings. Sharecoms have emerged worldwide, operating within a plethora of sectors, and while our study of 12 cases comprises a diverse range of sharecoms (i.e., in terms of home markets, size, service offering, and degree of internationalization), we recognize that our conclusions must, of course, remain tentative. However, we propose that our study can form the basis of a future research agenda.

In examining the phenomenon of sharecom internationalization and more specifically the pathways adopted, it could be useful to further empirically test our model by examining cases from other parts of the world that may demonstrate different behaviors. Focus could also be given to countries where sharecoms are fast emerging yet remain understudied, e.g., the African continent, as region-specific factors may impact the strategic actions taken. This could further extend to a comparative case study, which would provide a more comprehensive portrayal of sharecom internationalization and enhance current theorizing.

Moreover, while our study identifies three patterns by which sharecoms internationalize, future research could explore the nature of these over time. We suggest that different patterns may be more suitable at different stages of internationalization and that sharecoms can switch accordingly. For example, a sharecom may start out pursuing a solely active path focused on building up user networks and communities in strategically targeted markets but once established in several countries it may decide to make its platform open to additionally enable user-led expansion. A longitudinal study could deepen our understanding of the sharecoms’ tendencies to change patterns, at which point, and the motives for doing so.

Finally, future studies using quantitative methods would greatly contribute to the knowledge we have built. While the number of cases included within our study was suited to the purpose, a larger sample size could test the firm-specific determinants that lead a sharecom to select a particular pattern of internationalization.