Digital Technologies and Firm Internationalization: The Role of Regional Digitalization

Abstract

The rapid diffusion of digital technology drives the application of related technologies in various sectors, and promotes the contexts of digitalization across national and regional boundaries. Whether such rapid digital penetration bring desirable outcomes to enterprises remains to be elucidated. In the context of digitalization from emerging markets, we examined the relationships among the degree of regional digitalization, and internationalization speed of enterprise by using the within-between random-effects model and 2009–2019 data from China. We also hypothesized and tested the moderate impacts of local embeddedness and institutional fragility on the above-mentioned relationships. Our results indicate that the effects of digital technology on the internationalization speed of manufacturing enterprises are complicated, influenced by both globalization- and deglobalization-driven forces rather than caused by simple positive or negative relationships. Moreover, local embeddedness means the enhancement of digital connectivity for the enterprise and stable support for enterprises' internationalization. While institutional fragility not only impedes the transformation of digital advantages, but also shows an escape-driven force for enterprise internationalization to some extent. The findings of this study contribute to the theory regarding enterprise internationalization in the era of digitalization.