Beggar or enrich-thy-neighbor? Impact of platform cross-border acquisition

Abstract

E-commerce platforms have increasingly pursued cross-border acquisitions in recent years, targeting either foreign online platforms or foreign brick-and-mortar retailers. Motivated by this practice, this paper investigates how the choice of acquisition target reshapes global supply chain dynamics. We develop a game-theoretic model that captures the data-driven network effect associated with acquiring foreign platforms and the in-store service investment and resulting showrooming effect from acquiring foreign retailers. Several findings emerge. First, both acquisition strategies are double-edged swords for the upstream manufacturer. Acquiring a foreign retailer raises the manufacturer’s profi..