Architecting competitive advantage of digital platforms: the role of network capability in upgrading for latecomer firms

Purpose In an era of de-globalization, latecomer firms from emerging economies face increasingly complex upgrading challenges. Although digital platforms offer novel opportunities for this process, scholarly research on whether and how they facilitate upgrading remains underdeveloped. This paper aims to address these gaps. Design/methodology/approach Drawing on a sample of 157 Chinese firms, this study employs multiple regression analysis and PROCESS path analyses (vis SPSS) to test hypotheses related to upgrading. Findings (1) Platform architecture flexibility (PAF) is positively associated with both enterprises upgrading (EU) and network capability. (2) network capability fully mediates the relationship between PAF and EU through supplier integration (SI) and internal communication (IC). In contrast, customer interaction (CI) exhibits no significant mediating effect, revealing a notable distinction in the mechanisms driving upgrading. Practical implications De-globalization intensifies the difficulties that latecomer firms from emerging economies face in continuous upgrading. Platform-based upgrading offers a viable alternative, distinct from conventional pathways such as “Kaplinsky upgrading” and “Gereffi upgrading”. To achieve upgrading, firms should optimize PAF by designing reusable, compatible and scalable platform architecture. Additionally, leveraging SI and IC practices can further facilitate upgrading. Originality/value This paper provides valuable insights for latecomer firms in emerging economies on how to effectively align PAF with network capability to achieve upgrading.