Sharing Platform Businesses'Responses to Legitimacy Challenges in Foreign Markets

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In the past decade, sharing has regained the interest from scholars, because an increasing number of businesses with disruptive business models and distinct internationalization have accrued significant levels of power and have overthrown existing industries. These businesses, considered part of the sharing economy, rely on digital platforms to facilitate transactions between peers, who either provide or consume access to underutilized assets. Due to the disruptive and distinct nature, sharing platform international new ventures (INVs) face novel legitimacy challenges when entering foreign markets. Since obtaining legitimacy is vital for viability in a market, sharing platform businesses respond to these challenges. Although the extant literature comprises frameworks that categorize responses to legitimacy challenges, these lack a focus on the responses of sharing platform INVs and the novel legitimacy challenges faced. An interpretive inductive theory-building approach is followed to explore the responses of sharing platform businesses to legitimacy challenges in foreign markets. This results in six responses, namely ‘contesting’, ‘accepting’, ‘collaborating’, ‘mobilizing users’, ‘embedding’, and ‘explaining’. The findings contribute to literature on the internationalization of sharing platform businesses, the influence of INVs on institutions, legitimation strategies, and disruptive business models. In practice, the responses contribute to managers of sharing platform businesses, policymakers, incumbents, and sharing platform users. Keywords: peer-to-peer sharing platforms, business model innovation, international new ventures, legitimacy.
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