Understanding the boundary decision of digital platform enterprises

Abstract

PurposeBoundary decision is an important but underexplored theme in digital platform research. The boundary decision of digital platform enterprises (DPEs) differs from traditional organizations because of cross-side network effects (CNEs). This study intends to investigate whether transaction cost economics (TCE) and resource-based view (RBV), as classical organization boundary mechanisms, are still applicable for DPEs.Design/methodology/approachTo unfold the research problem, this study conducts a fuzzy-set qualitative comparative analysis (fsQCA) on the samples of 21 platform business units.FindingsThe results show that the classical boundary decision theory still applies in the context of DPEs, but the cross-side network effects will affect boundary decision of DPEs.Originality/valueThis study provides a new framework – integrates TCE, RBV and CNEs – to analyze boundary decision of DPEs. This paper also contributes to research on both organization boundary decision and platform governance.