Digital Internationalization

Question 1

What does digitalization enable with respect to internationalization?

Answer 1

• reduces coordination and control across countries
• increases speed of interaction with customers
• greatly faster data analysis and decision making

Question 2

Which are the two types of firm specific advantage (FSA) outlined by Rugman and Verbeke (2001)?

Answer 2

1. non-location bound FSA: can be trasferred abroad with low transaction costs and without substantial adaptation
2. location bound FSA: bounded to specific markets and thus necessitates substantial adaptation in other foreign markets.

Question 3

What is the effect of digitalization on FSAs?

Answer 3

Digitalization reduces the impact of LB constraints, leading FSAs to shift to a non-location bounded nature.

Question 4

What is IDI? and which relation with digitalization and FSAs?

Answer 4

IDI (Industrial Digital Intensity) measures the dependence of and industry on e-commerce and pc networks for the ownership or right transfer to use its products and services.

Industries with higher IDI and strong FSA will benefit the most from digitalization, which reduces LB constraints.

Question 5

Which are the effects of digitalization on the internationalization of SMEs?

Answer 5

1. enhance learning capabilities and thus innovation capability
2. more effective market information acquisition and interpretation