| dc.description.abstract | Digital platforms such as Uber, Deliveroo and Airbnb are part and parcel of present times.
Previous studies mention how digital platforms transcend market boundaries, making them
‘market-agnostic’. Practice has shown how digital platforms often disrupt the markets that
they enter, thereby formulating new rules of the game. This forms a discrepancy with what
is proclaimed in institutional theory, that is, an organization needs to conform to its
institutional environment to be perceived as legitimate. While existing literature is often
concerned with studying the legitimation of platforms through case studies that take place
in a single market, how the legitimation of digital platforms is affected on a macro-level
has hitherto remained unexplored. Hence, this study addresses the current gap in the
literature by examining how digital platforms leverage legitimacy spillovers from markets.
More formally, the study asks: to what extent does the market entry of a digital platform
in the Netherlands depends on external legitimacy spillovers? In defining external
legitimacy spillovers, the theoretical perspectives of institutional theory and organizational
ecology are synthesized in the form of the density dependence model. This study
specifically extents the basic density dependence model by taking the markets where the
platforms are active in as unit of analysis. In the model, the density of platforms in a
market is used as a proxy for legitimacy spillovers and competition. The model is applied
in the form of logistic regression analyses on two samples during the period of 2010 to
2020: the population of gig platforms and the population of sharing platforms in the
Netherlands. The results prove that digital platforms benefit from legitimacy spillovers by
other platforms in the same market on the short term, while concomitantly being
negatively affected by spillover effects from other markets. However, as local competition
between platforms becomes more intense, subsequent market entry also becomes
dependent on legitimacy spillovers from platforms in other markets. This study suggests
that the latter effect is induced by platforms that engage in institutional transposition,
which denotes the process in which the status and experience garnered in one market is
converted to another dimension. These results are integrated into a proposed visual model
that illustrates the relationship between digital platforms and spillover effects within and
between markets. In doing so, this study marks the beginning of uncovering how digital
platforms can leverage legitimacy spillovers from markets through transposition. | |
