Creating Value in Metaverse-Driven Global Value Chains: Blockchain Integration and the Evolution of International Business

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

Dear authors,

Greetings and thank you for your efforts. The following comments can enhance the quality of your manuscript:

1. Abstract: The abstract should include a clear study aim, methodology, key findings, and recommendations. Please rewrite it to ensure the availability of the mentioned aspects.
2. In the manuscript, use authors instead of "we".
3. Introduction: In the introduction, try to clearly highlight the research gap by addressing the limitations of existing studies and highlight the manuscript's contribution in filling this research gap.
4. I suggest changing the name of "Background" to "Literature Review" as this is the usual usage.
5. Discussion: The manuscript ignores the significant challenges of the regulatory landscape and taxation complexities of the metaverse. These regulations and taxations are still developing in many countries. Authors can address how these regulations and taxation complexities could impact multinational enterprises (MNEs) operating in virtual environments. More detailed analysis on these issues with some supporting recommendations would enhance the quality of this manuscript and provide practical insights for businesses navigating the metaverse.
6. All the figures should have a clear source. 

All the best,

Author Response

Comment 1: 

The abstract should include a clear study aim, methodology, key findings, and recommendations. Please rewrite it to ensure the availability of the mentioned aspects.

Response 1: Authors rewrite the Abstract by considering the first reviewers’ kind comment:
The convergence of blockchain and metaverse technologies is poised to redefine how global value chains (GVCs) create, capture, and distribute value, yet scholarly insight into their joint impact remains scattered. Addressing this gap, the present study aims to clarify where, how, and under what conditions blockchain-enabled transparency and metaverse-enabled immersion enhance GVC performance. A systematic literature review (SLR)—conducted in accordance with PRISMA 2020 guidelines—screened 300 records from ABI Global, Business Source Premier, and Web of Science, yielding 65 peer-reviewed articles for in-depth analysis. The corpus was coded thematically and mapped against three theoretical lenses: Transaction Cost Theory, the Resource-Based View, and network/ecosystem perspectives. Key findings reveal that 1: digital twins anchored in immersive platforms reduce planning cycles by up to 30 % and enable real-time, cross-border supply-chain reconfiguration; 2: tokenised assets, micro-transactions, and decentralised finance (DeFi) are spawning new revenue models but simultaneously shift tax triggers and compliance burdens; 3: cross-chain protocols are critical for scalable trust, yet regulatory fragmentation—exemplified by divergent EU, U.S., and APAC rules—creates non-trivial coordination costs; and 4: traditional IB theories require extension to account for digital-capability orchestration, emerging cost centres (licensing, reserve backing, data audits), and metaverse-driven network effects. Based on these insights, the study recommends that managers adopt phased licensing and geo-aware tax engines, embed region-specific compliance flags in smart-contract metadata, and pilot digital-twin initiatives in sandbox-friendly jurisdictions. Policymakers are urged to accelerate work on interoperability and reporting standards to prevent systemic bottlenecks. Finally, researchers should pursue multi-case and longitudinal studies measuring the financial and ESG outcomes of integrated blockchain–metaverse deployments. By synthesising disparate streams and articulating a forward agenda, this review provides both a conceptual bridge for international-business scholarship and a practical roadmap for firms navigating the next wave of digital GVC transformation.

Comment 2: Use authors instead of "we" in the manuscript.

Response 2: 

The authors changed all the pronouns to maintain a formal tone, keep clarity, and avoid ambiguity!

Comment 3: In the introduction, try to clearly highlight the research gap by addressing the limitations of existing studies and highlight the manuscript's contribution in filling this research gap. 
Response 3: 

The authors rewrite the Introduction by highlighting the first reviewers’ kind comment:

Digitalisation has entered a phase where convergent general-purpose technologies—notably blockchain and the metaverse—are beginning to reshape how value is created, captured and distributed across Global Value Chains (GVCs). Blockchain provides the secure, tamper-evident infrastructure required for fine-grained traceability and automated settlement (Angelopoulos & Panopoulos 2023; Kshetri 2023), while metaverse platforms add an immersive layer that collapses geographical distance and enables real-time co-creation among globally dispersed actors (Johnston 2023; Dwivedi et al. 2023). Taken together, these technologies promise a shift from cost-driven optimisation toward data-rich, experience-centric GVCs that foreground transparency, resilience and customer engagement (Nikolakis et al. 2018; Wang & Guo 2023).

1.1 Limitations of the extant literature

The scholarly conversation, however, remains fragmented along three fault-lines:

1.Siloed treatment of blockchain and the metaverse. Most studies examine either chain-of-custody applications of blockchain (e.g., Mukherjee et al. 2022) or metaverse use-cases in marketing and training (Calandra et al. 2022), leaving their joint orchestration in GVCs largely unexplored (Neumeyer et al. 2020; Ahmad Termizi et al. 2022).

2.Lack of empirical evidence on enterprise-scale integration. Existing work is dominated by conceptual pieces and pilot anecdotes; systematic evidence on performance outcomes—inventory turns, lead-time compression, ESG impact—remains scant (Ediriweera & Wiewiora 2021; Jacob et al. 2023).

3.Under-specified governance and policy context. Rapidly evolving regulation (data localisation, crypto-asset licensing, virtual-goods taxation) is often acknowledged only in passing, yet it fundamentally conditions adoption decisions and cross-border scalability (Angelopoulos & Panopoulos 2023).

These gaps impede both theory building and managerial guidance: without integrated frameworks and comparative evidence, firms and policymakers lack clear road-maps for harnessing the combined potential of blockchain-enabled traceability and metaverse-enabled collaboration.

1.2 Purpose and contributions of this study

To address these shortcomings, we conduct the first systematic literature review (SLR) that explicitly crosses the three streams—blockchain, metaverse and GVCs—and evaluates their points of intersection. Screening 65 peer-reviewed articles from ABI Global, Business Source Premier and Web of Science (PRISMA 2020 protocol), we:

• Map the thematic landscape and show where current research clusters (e.g., NFT provenance, digital twins, DeFi logistics) do—and do not—interact.
• Identify five research gaps that persist after a decade of digital-supply-chain scholarship, ranging from token-based micro-monetisation to cross-chain governance.
• Derive a testable agenda encapsulated in five research questions (RQ1–RQ5) that link technological affordances to internalisation choices, supply-chain coordination, new monetisation logics, cross-chain participation and the need for international standards. 
  • Advance theory by revisiting Transaction Cost Theory, the Resource-Based View and network perspectives through a blockchain–metaverse lens, thereby specifying how new digital capabilities (e.g., tokenised assets, immersive co-design) reconfigure classic IB constructs.
  • Offer actionable insight for practitioners via comparative regulatory analysis and documented enterprise cases that demonstrate measurable efficiency and resilience gains.

  By stitching together these contributions, the article fills the empirical and conceptual void at the heart of the digital-GVC debate: it shows not merely that blockchain and the metaverse can interact, but how—and under which boundary conditions—their integration delivers verifiable value at scale.

  1.3 Article structure

  Section 2 reviews foundational concepts and situates the study within extant theory. Section 3 details the SLR methodology and presents descriptive trends. Section 4 synthesises the findings around the five RQs, integrating illustrative enterprise evidence and regulatory contrasts. Section 5 concludes with theoretical implications, managerial guidance and a forward-looking research agenda.

Comment 4: I suggest changing the name of "Background" to "Literature Review" as this is the usual usage. 

Response 4: 

Yes, suggesting the change from "Background" to "Literature Review" is an excellent and standard recommendation for improving the clarity and adherence to academic norms in a manuscript.

Comment 5: The manuscript ignores the significant challenges of the regulatory landscape and taxation complexities of the metaverse. These regulations and taxations are still developing in many countries. Authors can address how these regulations and taxation complexities could impact multinational enterprises (MNEs) operating in virtual environments. More detailed analysis on these issues with some supporting recommendations would enhance the quality of this manuscript and provide practical insights for businesses navigating the metaverse. 

Response 5: 

This is a very insightful and important point for the authors to consider! Authors rewrite this subsection by addressing the impacts on MNEs:

Taxation and Regulatory Implications: While Industry 4.0 and the Metaverse unlock unprecedented commercial opportunities, they also introduce complex regulatory challenges. Governments worldwide are still calibrating how to tax and oversee digital transactions, especially those involving intangible assets or emerging token economies. Crucially, the pressures are not uniform: each major jurisdiction is pursuing its own blend of licensing, consumer-protection, and tax rules, forcing multinational enterprises (MNEs) to abandon the notion of a single “global” roll-out strategy.

• European Union – licence first, then scale. The Markets in Crypto-assets Regulation (MiCA) entered its final phase on 30 December 2024, requiring every crypto-asset service provider—including in-world marketplaces—to obtain a CASP licence and publish detailed white-papers before passporting services across 30 states. Parallel obligations under the Digital Services Act (DSA) expose “very large online platforms” to algorithm-audit and systemic-risk requirements, with fines up to 6 % of global turnover for non-compliance. Together, MiCA and the DSA make the EU the world’s strictest jurisdiction for metaverse infrastructure (European Union, 2023).
• United States – enforcement first, clarity later. The SEC continues to classify many in-world utility or governance tokens as securities, while Form 1099-DA obliges brokers to report every disposal of a digital asset—no de-minimis threshold—from 1 January 2025. That shift converts even $0.99 micro-sales of virtual goods into taxable events and raises the audit risk for U.S.-facing platforms (Internal Revenue Service, 2024).
• China – industrial metaverse, real-name rules. Provincial “metaverse action plans” promote virtual-twin applications in manufacturing, but NFTs must sit on state-approved chains and all users undergo real-name verification, effectively fencing off public-chain commerce.
• Singapore – sandbox friendliness, stable-coin discipline. The Monetary Authority of Singapore’s 2024 framework demands that any MAS-regulated single-currency stable-coin (SCS) be 100 % reserve-backed and redeemable at par within five business days; vendors exceeding S $100 k annual turnover must charge 9 % GST on B2C virtual goods from 2025.
• India – revenue-grab on micro-spends. From 1 October 2023 all deposits into online gaming or metaverse pay-to-play platforms attract a 28 % GST, plus 30 % income-tax on net winnings, making India the costliest mainstream market for virtual goods.
• United Arab Emirates (Dubai) – tiered licensing and advertising rules. Dubai’s Virtual Assets Regulatory Authority (VARA) now issues activity-specific rulebooks covering issuance, custody, brokerage and marketing; all metaverse platforms reaching UAE residents must hold a VARA licence and comply with strict marketing disclosures.

Some countries have proposed or enacted DSTs targeting large platform companies. However, these regimes often do not consider microtransactions or do so inconsistently. Policymakers may create new guidelines for virtual asset taxation or an expanded version of the Global Tax Agreement to address intangible asset appreciation and “virtual supply chains.” To mitigate risk, MNEs increasingly engage with policymakers and industry coalitions, helping shape digital trade agreements that are future-proof and conducive to innovation. In the process, they reduce the risk of abrupt or contradictory regulations and maintain constructive relationships with tax authorities. A strategic approach necessitates prioritizing the phased roll-out of licenses and tax frameworks ahead of product features, proactively engaging with EU, MAS, and OECD working groups to influence policy, architecting ledgers with built-in auditability, employing a prudent tokenization strategy that utilizes off-chain entitlements for complex jurisdictions and fully-backed stable-coins where regulations are clear, and proactively conducting scenario testing for potential MiCA-driven stable-coin delistings or SEC re-classifications while integrating kill-switches into susceptible assets.

Comment 6: All the figures should have a clear source.
Response 6: This is a fundamental principle of academic integrity and a crucial piece of feedback for the authors. The sources for each figure are mentioned below!

Author Response File: Author Response.docx

Reviewer 2 Report

Comments and Suggestions for Authors

This article presents a systematic literature review examining how blockchain and metaverse technologies are reshaping global value chains (GVCs). The authors effectively connect emerging digital tools with foundational international business theories, offering a clear research agenda through five structured research questions.

The paper highlights blockchain’s role in improving transparency and trust, and discusses how digital twins and platformization drive new forms of coordination and value creation. It also addresses regulatory challenges, such as cross-border taxation and the fragmentation of blockchain protocols, emphasizing the urgent need for global standardization.

While the article offers a strong conceptual synthesis, it could be improved by including more empirical evidence or case studies to support the theoretical arguments. Additionally, the discussion around regulatory challenges would benefit from a deeper comparison of regional approaches, rather than treating global governance as a uniform need.

Author Response

Comment 1: it could be improved by including more empirical evidence or case studies to support the theoretical arguments.

Response 1: 

Yes, we wholeheartedly agree with the reviewer's valuable point regarding the importance of empirical studies in substantiating our arguments. We acknowledge that the current version of the manuscript could benefit from a stronger grounding in empirical evidence.

We want to clarify that in our literature, we have made a concerted effort to include and cite existing empirical studies that directly or indirectly address the phenomena we are investigating within the metaverse context. These studies, while often preliminary given the nascent stage of the metaverse, provide some empirical insights into 'user engagement and business interest'.

Furthermore, our analysis in Discussion Section draws upon observable trends and early data points reported by industry analysts and market research firms.

We appreciate the reviewer's emphasis on this crucial aspect and believe that future work focusing on primary data collection and analysis will build upon the groundwork laid in this manuscript.

 

Comment 2: the discussion around regulatory challenges would benefit from a deeper comparison of regional approaches, rather than treating global governance as a uniform need.

Response 2: 

This is a very insightful and important point for the authors to consider! Authors rewrite this subsection by addressing the impacts on MNEs:

Taxation and Regulatory Implications: While Industry 4.0 and the Metaverse unlock unprecedented commercial opportunities, they also introduce complex regulatory challenges. Governments worldwide are still calibrating how to tax and oversee digital transactions, especially those involving intangible assets or emerging token economies. Crucially, the pressures are not uniform: each major jurisdiction is pursuing its own blend of licensing, consumer-protection, and tax rules, forcing multinational enterprises (MNEs) to abandon the notion of a single “global” roll-out strategy.

• European Union – licence first, then scale. The Markets in Crypto-assets Regulation (MiCA) entered its final phase on 30 December 2024, requiring every crypto-asset service provider—including in-world marketplaces—to obtain a CASP licence and publish detailed white-papers before passporting services across 30 states. Parallel obligations under the Digital Services Act (DSA) expose “very large online platforms” to algorithm-audit and systemic-risk requirements, with fines up to 6 % of global turnover for non-compliance. Together, MiCA and the DSA make the EU the world’s strictest jurisdiction for metaverse infrastructure (European Union, 2023).
• United States – enforcement first, clarity later. The SEC continues to classify many in-world utility or governance tokens as securities, while Form 1099-DA obliges brokers to report every disposal of a digital asset—no de-minimis threshold—from 1 January 2025. That shift converts even $0.99 micro-sales of virtual goods into taxable events and raises the audit risk for U.S.-facing platforms (Internal Revenue Service, 2024).
• China – industrial metaverse, real-name rules. Provincial “metaverse action plans” promote virtual-twin applications in manufacturing, but NFTs must sit on state-approved chains and all users undergo real-name verification, effectively fencing off public-chain commerce.
• Singapore – sandbox friendliness, stable-coin discipline. The Monetary Authority of Singapore’s 2024 framework demands that any MAS-regulated single-currency stable-coin (SCS) be 100 % reserve-backed and redeemable at par within five business days; vendors exceeding S $100 k annual turnover must charge 9 % GST on B2C virtual goods from 2025.
• India – revenue-grab on micro-spends. From 1 October 2023 all deposits into online gaming or metaverse pay-to-play platforms attract a 28 % GST, plus 30 % income-tax on net winnings, making India the costliest mainstream market for virtual goods.
• United Arab Emirates (Dubai) – tiered licensing and advertising rules. Dubai’s Virtual Assets Regulatory Authority (VARA) now issues activity-specific rulebooks covering issuance, custody, brokerage and marketing; all metaverse platforms reaching UAE residents must hold a VARA licence and comply with strict marketing disclosures.

Some countries have proposed or enacted DSTs targeting large platform companies. However, these regimes often do not consider microtransactions or do so inconsistently. Policymakers may create new guidelines for virtual asset taxation or an expanded version of the Global Tax Agreement to address intangible asset appreciation and “virtual supply chains.” To mitigate risk, MNEs increasingly engage with policymakers and industry coalitions, helping shape digital trade agreements that are future-proof and conducive to innovation. In the process, they reduce the risk of abrupt or contradictory regulations and maintain constructive relationships with tax authorities. A strategic approach necessitates prioritizing the phased roll-out of licenses and tax frameworks ahead of product features, proactively engaging with EU, MAS, and OECD working groups to influence policy, architecting ledgers with built-in auditability, employing a prudent tokenization strategy that utilizes off-chain entitlements for complex jurisdictions and fully-backed stable-coins where regulations are clear, and proactively conducting scenario testing for potential MiCA-driven stable-coin delistings or SEC re-classifications while integrating kill-switches into susceptible assets.

Author Response File: Author Response.docx

Reviewer 3 Report

Comments and Suggestions for Authors

The following suggestions are for your reference:

1 Emphasize the unique value of the research more clearly (e.g., theoretical integration, cross-technology synergies), rather than just describing the functions of existing technologies.
2 The existing literature gap (e.g., empirical integration research on blockchain and the metaverse) can be specified further to highlight the contributions of this study.
3 Additional details on the flowchart are needed (e.g., the number of articles included, reasons for exclusions), and explain how to avoid selection bias.
4 Some arguments (e.g., "digital twins enhance supply chain coordination") lack empirical case support; actual enterprise applications can be supplemented.
5 Compare with existing research to identify innovative aspects that enhance the practical value of the paper.
6 The evolution of internalization theory in the metaverse can be discussed in conjunction with specific corporate strategies (e.g., platform governance mechanism design) to avoid theoretical generalization.

Author Response

Comment 1: Emphasize the unique value of the research more clearly (e.g., theoretical integration, cross-technology synergies), rather than just describing the functions of existing technologies. 

Response 1: 

We appreciate this crucial feedback. In the revised manuscript, we have taken specific steps to address this. We have strengthened the Introduction and Conclusion sections to more prominently emphasize the unique value proposition of our work.

Throughout the manuscript, we have also made a conscious effort to shift the narrative from a descriptive account of existing technologies to an analytical discussion of how our research builds upon and extends current understanding. We believe these revisions more clearly demonstrate the unique theoretical insights and potential practical synergies that our work offers to the field.

Thank you for highlighting this critical area for improvement.

Comment 2: The existing literature gap (e.g., empirical integration research on blockchain and the metaverse) can be specified further to highlight the contributions of this study.

Response 2: 

We greatly appreciate this insightful suggestion. We agree that a more precise articulation of the existing literature gap will strengthen it. In the revised manuscript, we have dedicated more attention in the Introduction section to specifically delineate the gap our study aims to fill. From the revised manuscript:

The scholarly conversation, however, remains fragmented along three fault-lines:

1.Siloed treatment of blockchain and the metaverse. Most studies examine either chain-of-custody applications of blockchain (e.g., Mukherjee et al. 2022) or metaverse use-cases in marketing and training (Calandra et al. 2022), leaving their joint orchestration in GVCs largely unexplored (Neumeyer et al. 2020; Ahmad Termizi et al. 2022).

2.Lack of empirical evidence on enterprise-scale integration. Existing work is dominated by conceptual pieces and pilot anecdotes; systematic evidence on performance outcomes—inventory turns, lead-time compression, ESG impact—remains scant (Ediriweera & Wiewiora 2021; Jacob et al. 2023).

3.Under-specified governance and policy context. Rapidly evolving regulation (data localisation, crypto-asset licensing, virtual-goods taxation) is often acknowledged only in passing, yet it fundamentally conditions adoption decisions and cross-border scalability (Angelopoulos & Panopoulos 2023).

These gaps impede both theory building and managerial guidance: without integrated frameworks and comparative evidence, firms and policymakers lack clear road-maps for harnessing the combined potential of blockchain-enabled traceability and metaverse-enabled collaboration.

To address these shortcomings, we conduct the first systematic literature review (SLR) that explicitly crosses the three streams—blockchain, metaverse and GVCs—and evaluates their points of intersection. Screening 65 peer-reviewed articles from ABI Global, Business Source Premier and Web of Science (PRISMA 2020 protocol), we:

• Map the thematic landscape and show where current research clusters (e.g., NFT provenance, digital twins, DeFi logistics) do—and do not—interact.
• Identify five research gaps that persist after a decade of digital-supply-chain scholarship, ranging from token-based micro-monetisation to cross-chain governance.
• Derive a testable agenda encapsulated in five research questions (RQ1–RQ5) that link technological affordances to internalisation choices, supply-chain coordination, new monetisation logics, cross-chain participation and the need for international standards.
• Advance theory by revisiting Transaction Cost Theory, the Resource-Based View and network perspectives through a blockchain–metaverse lens, thereby specifying how new digital capabilities (e.g., tokenised assets, immersive co-design) reconfigure classic IB constructs.
• Offer actionable insight for practitioners via comparative regulatory analysis and documented enterprise cases that demonstrate measurable efficiency and resilience gains.

By stitching together these contributions, the article fills the empirical and conceptual void at the heart of the digital-GVC debate: it shows not merely that blockchain and the metaverse can interact, but how—and under which boundary conditions—their integration delivers verifiable value at scale.

Comment 3: Additional details on the flowchart are needed (e.g., the number of articles included, reasons for exclusions), and explain how to avoid selection bias. 

Response 3: 

We greatly appreciate this detailed feedback regarding the clarity and rigor of our methodology. We agree that providing additional details in the flowchart and explicitly addressing how we mitigated selection bias will significantly enhance the transparency and trustworthiness of our research process. From the revised version:

Clear and pre-defined inclusion and exclusion criteria were established prior to screening to guide the selection process. These criteria specified the conditions a study must meet to be included in the review (e.g., relevance to the research topic, publication type, language) as well as the conditions under which a study would be excluded (e.g., lack of relevance, duplicate publication, non-English language). These criteria were applied consistently by the reviewers throughout the title and abstract screening and full-text eligibility assessment phases, ensuring that decisions about study inclusion were made objectively and uniformly, thereby minimizing the potential for subjective bias in the selection of studies for this review.

Comment 4: Some arguments (e.g., "digital twins enhance supply chain coordination") lack empirical case support; actual enterprise applications can be supplemented.

Response 4: 

This is a very constructive and forward-looking suggestion. We appreciate this important feedback, and we acknowledge that the previous version of the manuscript may have presented this and similar statements without sufficient grounding.

In the revised manuscript, we have taken several steps to address this. Firstly, we have revisited the sections where such arguments are made and conducted a more thorough search for existing empirical evidence and case studies that support these claims. Where we have found relevant empirical work or documented enterprise applications, we have now included specific citations and brief descriptions to substantiate our points. For example, we now reference Port of Rotterdam (2024) showcasing the implementation of digital twins at a major impact on reducing lead times. From the revised manuscript:

For instance, the Port of Rotterdam (Netherlands) has announced plans to create a digital twin by 2030 (Stephens, M. et al., 2024; Port of Rotterdam, 2024). Real-time feeds from hydrological sensors, AIS vessel tracking, and meteorological stations already allow harbour masters to simulate berth occupancy and tidal windows, cutting unplanned vessel waiting time by an estimated 20 % and laying the foundation for autonomous tug operations. Because every stakeholder—terminal operator, pilot, dredging contractor—interacts inside the same virtual domain, rescheduling decisions propagate instantly through the chain, reducing knock-on delays far beyond the port gate.

Meanwhile, companies like Merck and Mercedes-Benz (in Germany) and major urban centers like Singapore and Shanghai (China) have also adopted digital twin technology to streamline tasks ranging from pharmaceutical production to urban planning. BMW models entire plants in NVIDIA’s Omniverse platform; planners on three continents co-edit the same scene graph, walk a VR line-side audit and push code that automatically updates physical robots. The company reports a 30 % reduction in production-planning time and similar gains in resource-utilisation efficiency for the forthcoming €2 billion Debrecen EV plant. Those savings arise because layout clashes, AGV traffic jams and ergonomic risks are resolved in the twin—well before steel is cut or suppliers are locked-in.

Comment 5: Compare with existing research to identify innovative aspects that enhance the practical value of the paper. 

Response 5: 

We appreciate the reviewer's suggestion. We confirm that we have indeed endeavored to do this throughout our manuscript. We have strived to clearly state how our research builds upon, diverges from, or offers a unique perspective compared to prior work.

In the Discussion and Conclusion sections, we have sought to articulate how these novel aspects of our research translate into enhanced practical value for ‘businesses seeking to leverage the metaverse,' 'policymakers developing regulations for virtual economies,' or 'researchers in the field'.

Comment 6: The evolution of internalization theory in the metaverse can be discussed in conjunction with specific corporate strategies (e.g., platform governance mechanism design) to avoid theoretical generalization. 

Response 6: 

We thank the reviewer for this insightful comment. We agree that grounding the theoretical discussion in specific corporate strategies will enhance the practical relevance and specificity of our analysis.

Our current discussion on Transaction Cost Theory (TCT) implicitly addresses elements of internalization choices by examining the trade-offs between leveraging external digital platforms/marketplaces ("Reduced Traditional Costs") and the need for new internal capabilities and investments ("New Cost Centers"). For instance, a firm's decision to use decentralized applications and smart contracts instead of traditional intermediaries (as discussed under TCT point 1) is a strategic choice driven by transaction cost considerations and has implications for how the firm governs these external relationships. Similarly, our discussion under the Network and Ecosystem Perspectives highlights how firms must manage relationships within digital ecosystems, mentioning the need for "co-governance of platform rules" for large MNEs.

Author Response File: Author Response.docx