1 Introduction

Digital transformation (e.g., internet of things, cloud computing, blockchain, big data, artificial intelligence, machine learning) relates to the far-reaching modifications taking places in virtually all business processes to harvest the payoffs provided by using the digital settings. Actually, digital transformation enables an entire string of fundamental changes in firms’ boundaries, processes, structures, roles, and interactions (Cennamo et al., 2020). In the last 2 decades, “the share of employment in occupations intensive in non-routine cognitive and socio-behavioral skills has increased from 19 to 23% in emerging economies, and from 33 to 41% in advanced economies” (The World Development Report, 2019). As such, the removal of traditional limitations has altered the deeply-seeded rules of competition (Cennamo, 2021; Iansiti & Lakhani, 2020).

For this reason, from a remote blind spot of management studies and practice not more than 5 or 6 years ago (Lanzolla & Anderson, 2008), digital transformation has hastily turned into an inclusive and pervasive phenomenon that no individual or firm can afford to overlook. In such a way, digital transformation has succeeded in taking such a central stage in the economy and society that it promises to keep in the foreseeable future. The inception of the Covid-19 global pandemic, marked by a series of lockdowns and the ensuing commanding work-from-home wave that have involved no less than four billion individuals connected through the web in virtually all world’s countries, has done nothing but amplifying and accelerating incredibly this transition from the analog to the digital age thereby enhancing dramatically the scale and scope of the digital transformation process (Saliola & Islam, 2020).

At the same time, there is the other side of the coin. The new waves of globalization, de-globalization (The World Development Report, 2020) and, perhaps, the early weak signs of post-Covid re-globalization (Bishop & Payne, 2021) are having a profound influence on the radical transformation of supply chains, manufacturing processes, marketing tools, governance mechanisms and organizational strategies. This condition drives existing firms to look for novel and unexplored growth paths beyond their traditional boundaries by expanding their operations internationally while, since their very inception, a good segment of newly-founded firms are to act as born-global entities.

Consequently, a more fine-grained understanding of the interfaces of these twin topical issues (i.e., digitalization and internationalization) turns extremely important not only for scholars and researchers, but also for managers, entrepreneurs, startuppers, consultants and investors operating in profit and non-profit organizations. Actually, in this essay we do not aim to develop a comprehensive understanding of how digitally-bounded firms internationalize and why their internationalization processes differ from one another. Rather, based on the close observation of the peculiarities of the digital age and of its effects on the application of the extant international business theories and approaches, as well as the content of the papers in this issue, we take the stance of proposing an original construct that we name “digital internationalization”. Since we have found no clue of a definition for such a construct in extant literature, we feel entitled to provide an initial definition of digital internationalization. We define digital internationalization as “the ways with which the design and implementation of a digital transformation path and the application of digitalization processes and tools may help firms of all sizes thrive in international and global contexts. This definition comes as a companion of our digital internationalization framework that encompasses the inception of the digital internationalization key variables: strategic capabilities, cultural distance and customer value orientation, and their unifying mechanism (i.e., generativity rule). The contours of these variables and unifying mechanism will be clarified in more detail in section four of this paper.

The remainder of this paper is organized as follows. Section two exhibits the condensed summaries of the seven papers contained in this issue. Section three Digital internationalization: the acceleration of an ongoing trend discusses earlier literature that has covered at large the issues of digitalization and firm internationalization especially in the perspective of the market expansion process, also pinpointing the risks and limitations of this strategic choice. Section four Digital internationalization framework: bridging digital transformation and internationalization introduces an original interpretive framework of digital internationalization encompassing the three key constituents and the unifying mechanism underlying the bridging of digital transformation and internationalization to achieve firm digital internationalization. The Concluding remarks and open questions section is eventually dedicated to gather a few concluding remarks and propose some intriguing questions that open up for further inquiry on the topical issue of digital internationalization.

2 The papers in this issue

In this issue, thanks to the wise selection of the set of submissions received we have eventually managed to collect seven high-quality and empirically grounded research works concerning the following items: how firms use digital transformation in various ways especially when it come to internationalize; how digital transformation of firms generates new opportunities for Made in Italy; the impact of digital transformation on cross-cultural and global branding strategies; how digital transformation affects a firm’s international marketing mix and the design and implementation of web marketing campaigns especially in multicultural contexts; the links between digital transformation and consumer behavior in relation to their impact of the consumer’s evaluation of local, hybrid and global products and brands. Taken together, we believe that this set of papers constitutes an excellent mix of outstanding contributions that have engaged a fruitful conversation with each other. Accordingly, they are able to shed new light on the key features of the processes tied to the firms’ digital internationalization.

Paper 1

The paper by Bergamaschi et al. (2021) presents an extensive review of the literature emphasizing that the study of the interplay between internationalization and digitalization is a relatively underdeveloped research domain that is currently expanding its academic reach and scope quite rapidly. By using a good mix of qualitative and quantitative methods, Bergamaschi et al. examined overall 68 peer-reviewed international business and management articles so as to be able of delving into the knowledge structure of the literature connecting internationalization and digitalization and recognizing the rising trends within it. From their analysis, the authors have extracted four phases concerning: (i) how internationalization and digitalization shape the firms’ inter-organizational features; (ii) how digitalization influences the equilibrium between perceived risk and returns in firm internationalization; (iii) how digital technologies adoption and internationalization channels influence internationalization and digitalization processes; and finally (iv) how internationalization and digitalization affect the firms’ intra-organizational aspects. This paper unveils the existence of a good degree of heterogeneity crosswise conceptual perspectives contributors used, the research methods they employed and the themes they covered.

Paper 2

The paper by Bertello et al. (2021) examines how big data analytics can assume strategic importance when it comes to promote small and medium-sized firms’ international growth paths. By means of a questionnaire administered to the CEOs of 266 SMEs in Italy, Bertello et al. collected an array of data. Their quantitative analyses shows that the relationship between the governance of big data analytics infrastructure and the degree of firm internationalization is not significant, while the direct effect of big data analytics capabilities and the interface between big data analytics infrastructure and capabilities are positive and significant. As concerns small and medium-sized firms’ international growth, the paper highlights the significance of developing idiosyncratic big data analytics capabilities to take advantage of the knowledge spreading out from the (wise) use of big data analytics.

Paper 3

The paper by Mariani and Matarazzo (2021) presents a big data analysis of customer online reviews of hospitality services to estimate the extent to which the cultural distance among service providers and their customers affects online review ratings. By inspecting some 715,000 online reviews printed by hotel customers from 100 different nationalities, Mariani and Matarazzo manage to detect cultural distance or the effect of national cultural differences among service customers and providers on online review ratings. By taking into account the reviewers’ behavioral features, demographics and trip-related factors, this paper unveils that the overall effect of cultural distance on online review ratings is negative.

Paper 4

The paper by Martinelli et al. (2021) presents an interpretative framework exploring the main legacy coming from the 2nd and 3rd industrial revolutions that in fact extends to the 4th industrial revolution. In particular, it aims to explain how the experience accumulated from the challenges of the 2nd and 3rd industrial revolutions may represents a key feature to shape the firms’ DNA that in turn guides their transformation is such a way that gradual radical change is favored vis-à-vis disruption. Martinelli et al. explorative inquiry is grounded on the inspection of three Italian manufacturing firms operating in multiple countries that had experienced the trial of the 2nd and 3rd industrial revolutions and are undergoing a wide-ranging digital transformation path. The evidence presented might turn helpful to international manufacturing firms when it comes to execute a digital transformation process prompt to increase their international competitiveness.

Paper 5

The paper by Mazzucchelli et al. (2021) examines how the broad use of Facebook in online advertising may help firms in building interactions and brand communities, in implementing social CRM activities and in conducting market research, thereby improving their international export performance. Mazzucchelli et al. administered a survey-based empirical analysis of 105 fashion firms operating worldwide. The results of their analyses illustrate that building conversations and brand communities positively influence the firms’ international export performance, while Facebook advertising produces mixed outcomes. By putting side by side firms that have a physical presence with those that do not, the authors found that the former benefited from in-store advertising and promotions to enhance their Facebook buy button conversion rate. While the latter enhanced their performance especially by adopting outdoor and transit advertising and digital marketing. Given that it allows to grasp how to implement an effective Facebook strategy to succeed in foreign markets, this paper advances an array of extant practical implications of social media marketing and international business.

Paper 6

The paper by Moi and Cabiddu is a single-case study involving the well-known platform Spotahome, a leading firm in online bookings of non-vacation home rentals. It offers an exploration of a new type of marketing capabilities that the authors have decided to term as “agile marketing capability”. Moi and Cabiddu, in particular, provide their definition of agile marketing capability and advance a framework for understanding their design and execution. Based on the design of agile marketing capability they are required to deploy to enhance agile practices in their firms, the paper also bears implications for marketing managers operating in international contexts.

Paper 7

The paper by Penco et al. (2021) detects the perceived usefulness and value creation potential of the application of mobile augmented reality. In fact, Penco et al. gathered their data using five semi-structured interviews with suppliers and retailers, as well as an extensive online survey administered to 361 consumers, all active in the “Made in Italy” food and beverage milieu. The key findings pinpoint that mobile augmented reality turns particularly helpful in the traceability of products and in the communication to consumers of nutritional information. Further, it serves quite well in identifying possible fabrication troubles for “Made in Italy” products, especially in such distant international markets as China and the US. The study offers useful insights as concerns the adoption of these mobile-touch technologies that involve firms and individuals operating in fast-changing international environments.

3 Digital internationalization: the acceleration of an ongoing trend

In the last decade, scholars have started to investigate in-depth the relationship between digitalization and firm international expansion (Lee et al., 2019; Neubert, 2018), by highlighting how digital technologies have contributed to dramatically change market environments, thereby opening up a brand-new Pandora’s box entirely filled with new challenges and opportunities (Quinton et al., 2018). In the aftermath of Covid-19 pandemic, this issue is becoming even more relevant. Not only it has further accelerated the spread of digital internationalization, but it has also fostered innovation in business processes, thereby making obsolete a great segment of the studies hitherto carried out.

In fact, the Covid-19 pandemic has contributed to change our lifestyle by forcing us to accept limitations to move around and constraints to interact physically that we had never thought we would have to tackle. At the same time, the Covid-19 has accelerated a wide range of processes already in action. In particular, as reported by Reeves et al. (2020) government policies to contain and control the pandemic have increasingly intensified the trend towards the use of remote sensing technologies. Firms, including the small and medium ones, have to tackle this new scenario by adopting new strategies and approaches to cope with the growing set of risks, where the defining role of digital technologies in surviving the new markets has turned clearer than ever.Footnote 1

Digitalization in international business operations is an area where academic research has been lagging behind the development of practices. The inaugural study mentioning the interplay between digitalization and internationalization was the one by Lovelock and Yip (1996). Notwithstanding this early beginning, the initial study of Lovelock and Yip has remained a sort of an orphan for rather a long time. In fact, research on the issue did all but following a linear progressive approach. On the contrary, it has rather advanced in an ups-and-downs-shaped manner. Actually, it has been only in the last five years that the research-practice gap has really started to taper in such vein thanks to a number of articles that have appeared in print, concerning in particular the great many opportunities that digital internationalization offers not only to large firms, but also to small and medium sized enterprises (SMEs). This literature also pointed out the risks and limitations resulting from selecting this strategic option. First, scholars have investigated how digital technologies can improve and support the various stages of firm internationalization process. In this vein, Katsikeas et al. (2019) provide an analysis of the organizational resources and capabilities required for supporting marketing strategies referring to each stage of the internationalization process by using digital technologies. They also argue how international marketers need to understand foreign customer attitudes and behavior, their competitive practices and the endogenous conditions.Footnote 2 The adoption of a digital approach to international business is a subject of hotly debates; first and foremost because it is a double-edged sword, presenting several advantages, but also limitations and potential risks, especially for SMEs.

Second, the advantages that firms can achieve through digital internationalization have been highlighted in the literature. In fact, digitalization makes it easier to cull various barriers and issues (Yip & Dempster, 2005) and to identify more quickly new market opportunities (Watson et al., 2018), establishing and nourishing business relationships with customers in various and distant foreign markets, irrespective of economic, political, cultural and other kinds of differences (Resciniti et al., 2019). As Katsikeas et al. (2019) argue, technological platforms, analytical tools and big data collection methods buttress firms in getting acquainted about customers’ preferences, attitudes, habits and interests, thereby allowing a customization of goods and services across different countries. Consequently, it becomes possible to implement firms’ quicker international segmentation, targeting, positioning and communication. Firms can not only collect a larger number of information, but they can also reach customers, develop faultless customer relationship management (CRM) strategies and receive real-time feedback from customers, thereby improving customer communication, trust, commitment and satisfaction (Mathews et al., 2016). Furthermore, firms can move faster than their competitors, thereby reducing the likelihood of making mistakes, incurring in delays and thus raising customer discontent (Katsikeas et al., 2019) and information asymmetries (Yamin & Sinkovics, 2006). In addition, Johnston et al. (2018) and Wasterlund (2020) underscore that the inception of digitalization processes allows firms to reduce operational and transaction costs, as well as to achieve economies of scale and scope and to diversify risks.

Third, notwithstanding the massive advantages of adopting digital technologies in international business operations, this approach presents also risks and limitations. Digitalization should by no means be seen as the way to ease success in international markets, but it requires the availability of specific skills and capabilities. As Michael Porter (2001) argued some twenty years ago, the inception of the digital age has intensified competition in global markets since, not only can existing competitors use digital tools in their foreign marketing operations, but also an increasing number of new firms (also digitally born) coming from several different countries are now able to surface in the international arena and compete consistently. Besides, since digital technologies are constantly evolving and dramatically changing the international scene (Katsikeas et al., 2019), firms are increasingly asked to turn more efficient, more productive and more innovative than their competitors. It follows that, as Katsikeas et al. (2019) pointed out, firms need to have the necessary expertise and abilities to transform digital technologies into skills and capabilities. Actually, they need first to acquire the right resources and then to develop the necessary capabilities to fully exploit these technologies for crafting and deploying successful strategies. This process appears particular critical because it depends on the firms’ human capital (Soto-Acosta & Angel Luis, 2008). On the one hand, it happens that to develop and maintain international market activities using online tools requires substantial time and effort, as well as the continuous support of adequate financial, human and technological resources (Medina-Viruel et al., 2016). On the other hand, it is crucial to monitor the firm’s presence and performance in several online sites (e.g., Facebook, Linkedin, Twitter, Instagram, Tik-Tok and others) and constantly update, adapt and respond to changes that are taking place in the global marketplace (Theodosiou & Katsikea, 2012).

The strengths and weaknesses of digital internationalization mentioned above are particularly relevant in the case of small and medium-sized enterprises. For these category of firms, in fact, a strong digital presence can be a very useful way to overcome the limits of size (the so-called “liability of smallness”), but it can still be difficult to manage without having the necessary skill and capability base.

As such, an advanced digital awareness and presence can contribute to mitigating the traditional internationalizations’ burdens related to firm size and to the inability to commit adequate financial and human resources (Tseng & Johnsen, 2011; Houghton & Winklhofer, 2004; Tarute & Gatautis, 2014; Mathews & Healy, 2008, Rebecca & Fischer, 2011). This condition also applies to small and medium-sized enterprises that want to export their product and services. In the international business literature, it has been frequently termed as “the liability of foreignness”.

In such vein, it should be noted that not seldom SMEs lack a proactive approach to digital technologies adoption or are unfamiliar to digital technologies (Cassetta et al., 2019). This drawback is highlighted by Westerlund (2020), who underlines that many SMEs are unable to internationalize by using the digital channels because most of them have not been originally designed to compete in a such hypercompetitive world (D’Aveni, 1994) of platforms competition and omnichannel management. Furthermore a practical problem for these firms is the little knowledge its management usually has of the current digitalization trends (Hervé et al., 2020). This condition is further aggravated by that: since SMEs have limited resources for engaging in trial-and-error rounds of experiences (Lee et al., 2019), they often decide to “play safe” and not to discard their traditional business model/s. Because of the difficulties reported, SMEs are at high risk of survival, a risk already raised by Sommer (2015), that they (or at least some of them) may become inevitable victims of the digital turn.

Nonetheless, while it is crystal-clear that the post Covid-19 evolution is, to a large extent, a question mark, we are confident that the issues of internationalization, digitalization, and sustainability are today and are going to be the three key growth drivers for all firms, and especially for SMEs, also in the foreseeable future. We also know that, in such respect, especially SMEs are called to improve dramatically and in a very short timeframe their digital readiness and awareness levels, their digital mindset, and their digital resources, skills and capabilities, as Denicolai et al. (2021) recently emphasized. In addition, for the world's multiple transformations driven by climate change and the related bouquet of international initiatives and agreements that are put into action, such as the UN sustainable development goals and the Paris accord, sustainability issues are inescapably taking the scene and will certainly become increasingly paramount in the years to come for all digitalized firms pursuing internationalization paths. This condition not only applies to large established firms, but regards as well SMEs and newly-born ventures that are progressively expected to design and implement a set of sustainable measures.

4 Digital internationalization framework: bridging digital transformation and internationalization

International business theory has traditionally focused on such variables as efficiency of the global value chain, the development of the multinational enterprise’s (MNE) internal capabilities and resource endowments, the growth of the internationally-oriented human and managerial capital and the (mutable) relationships between the corporate headquarters and its foreign subsidiaries. Both the liability of foreignness, the Uppsala model and the export development process literatures posit that firms are typically slow in developing foreign sales (e.g., Andersson et al., 2004; Arregle et al., 2012), and that this condition will be especially true for small and medium-sized enterprises which ‘‘have fewer resources and experience compared to their larger counterparts’’ (Cerrato and Piva, 2012: 619).

Our aim here is to show that, while these theories may continue to have an impact on digital firms’ internationalization paths, in the fast changing digital markets, other variables cannot be overlooked. In particular, we aim to craft an interpretive framework of digital internationalization by delving into the basic triad of its key constituents: (a) strategic capabilities, (b) cultural distance and (c) customer value. This means that a firms’ successful digital internationalization path requires at least the co-presence of the three constituent features:

  1. (a)

    the strategic capabilities needed to design and implement the digital internationalization path;

  2. (b)

    the awareness of the distinctiveness of the cultural distance of the regions or county/ies to enter; and

  3. (c)

    the customer value orientation, that is the entrepreneurial and managerial mindset oriented to imagine and execute persistently customer-centric operations in all the regional and country markets they have decided to operate in.

By taking this original view, the purpose of this Journal of Management and Governance issue is to give management scholars and practitioners a few hints that are functional to place them in a better position and with more powerful lenses to analyze the contours connecting the key constituents of digital internationalization and detecting the compelling challenges tied to this endeavor. Actually, taken together the three constituent issues of digital transformation and firm internationalization compose a distinct object that bears both the promise and the premise to provide an improved understanding of the features of the digitalization processes that are at the basis of firm thriving internationalization. But as such we ought to admit that they are not to be looked in isolation. In fact, a unifying force is required to put the three moments together. This digitally-grounded unifying force is, in our view, part of the so-called digitally-driven generativity rule (Cennamo and Santalò, 2019).Footnote 3 Actually, since the Internet acts as a “generative force” that allows its users to create and communicate in ways that are earlier unimagined, we can say that “generativity” is the unifying mechanism allowing strategic capabilities, cultural distance and customer value orientation to play together in the same pool, thereby finding out balancing moments (something alike multiple equilibriums). The presence of this significant generativity situation is corroborated by the exponential (or logarithmic scale) nature of digital technologies vis-à-vis analog technologies that, as widely known, had traditionally been leaning towards a linear scale (see Fig. 1).

Fig. 1
figure 1

The exponential nature of digital technologies and digital operating model

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In fact, in addition to the impact of value creation and global supply chain services (e.g., firm-specific capabilities and resources), the specific way of creating value and the individual customer interfaces digitally-grounded firms use play a key role in digital internationalization.

Figure 2 displays a stylized representation of the digital internationalization interpretive framework with its three key constituents (i.e., strategic capabilities cultural distance and customer value), and the strategic role of the unifying mechanism of the generativity rule. In this figure, according to their respective content and aim, we have also succeeded in positioning all the seven papers in this issue. Three of them (Bertello et al., 2021; Martinelli et al., 2021; and Moi & Cabiddu, 2021) are located in the strategic capabilities quadrant, two (Mariani & Matarazzo, 2021; Bergamaschi et al., 2021) are situated in the cultural distance section and finally the remaining two (Mazzucchelli et al., 2021; Penco et al., 2021) are inserted in the customer value orientation segment. Beyond the real and concrete positioning, we have reasons to believe that this interpretation of ours bears a symbolic and evocative character.

Fig. 2
figure 2

Digital internationalization framework: strategic capabilities, cultural distance and customer value

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For this reason, we can confirm that the path towards digital internationalization, by matching the two constituent segments of digital transformation and firm internationalization, displays some salient loop-wise characteristics that we report below:

  1. (a)

    digital transformation enables the proclivity of firms to go international beyond their ‘safe’ domestic borders;

  2. (b)

    digital transformation enhances the speed of firms’ internationalization paths;

  3. (c)

    digital transformation enhances the width of firms’ internationalization paths;

  4. (d)

    a wider internationalization path requires in turn (one or more) additional rounds of digital transformations by the internationalizing firm/s involved.

5 Concluding remarks and open questions

In this paper, we have introduced an operational definition of digital internationalization and have proposed to establish it on the triad of its key constituents: strategic capabilities, cultural distance and customer value. We have also identified the kind of glue-like mechanism sticking together the three key segments (i.e., generativity rule) and positioned the papers in this issue in the of digital internationalization framework. This means that a firms’ successful digital internationalization path requires at least the co-presence of the three constituent features that are matched by generativity rule. In addition, earlier in the paper we had provided the summaries of the seven papers contained in this issue and reviewed previous literature on the key issues of digitalization and firm internationalization, also looking at the risks and limitations of this strategic choice. This final section is directed to assemble some concluding remarks to propose a few questions that remain open for future inquiry.

First, in this paper we have provided an operational definition of digital internationalization. While we support that this is the initial attempt to advance a definition of digital internationalization, we also recognize that further investigation may lead to a more refined and specific characterization.

Second, we put emphasis on that we are only at the beginning of the research body explicating the functions and roles of the three constituents of digital internationalization. Therefore, further inquiry is certainly expected on each of them (i.e., strategic capabilities, cultural distance and customer value) as well as on their interplay.

Third, we call for additional research specifically devoted to the clarification of the unifying mechanism for the three segments (i.e., generativity rule). This may come to explain more profoundly and more in detail the sources, process and consequences of this relevant mechanism in the context of digital internationalization.

Fourth, while we recognize that generativity rule has been looked in the context of digital technologies and digital platforms, we know that the design, implementation and governance of digital internationalization platforms and ecosystems, especially over time and over multiple geographies, has been heretofore a subject of very little or no exploration (Gawer, 2020). Therefore, we call for inquiry on this extremely important issue for advancing our knowledge on digital internationalization.

Fifth, we call for additional research on loop-wise firms’ digital internationalization paths that may encompass one or more rounds of digital transformations by the internationalizing firms involved.

Last but not least, as we have argued earlier, the twin issues of internationalization, digitalization, and sustainability are going to be the fundamental growth drivers for all firms, and particularly for SMEs. As Denicolai et al., recalled, SMEs are called to improve dramatically and in a short time their digital readiness and awareness, digital mindset as well as digital resources, skills and capabilities. Consequently, in the future we expect nothing else but to see novel empirically sound research on the sustainability of firms’ international paths guided by digitalization.