Location choices in digital internationalization: User adoption and resource constraints

Digital openness is increasingly diminishing the importance of cross-national borders and challenging the traditional internationalization theory. We extend the Uppsala model to digital platform settings by examining how firms decide when and where local user adoption warrants deeper commitment to foreign markets. We argue that local user adoption provides an early and observable, though imperfect, signal of market potential. Drawing on the Technology Acceptance Model, we conceptualize adoption as the aggregated behavioral manifestation of host-country users' evaluations of an offering, while retaining the Uppsala model's core emphasis on incremental commitment under uncertainty. Employing a large-scale dataset of mobile app businesses, we find that local user adoption increases foreign market commitment. This relationship is weakened when firms face higher opportunity costs associated with a stronger home-market orientation, higher execution costs associated with greater cultural distance, and higher competitive costs associated with greater competitive turnover. By contrast, stronger imitation cues from successful rivals strengthen this relationship by lowering perceived competitive costs and clarifying whether localization is viable. These findings advance research on digital internationalization by showing how platform-visible user responses enter firms' commitment decisions and by specifying the conditions under which “follow-the-user” strategies are more or less persuasive.