Industry and Innovation— Innovation and internationalization in the digital era

When:  May 28, 2023 from 09:00 to 23:59 (CET)
Associated with  Entrepreneurship (ENT)

Innovation and internationalization in the digital era: new theoretical perspectives and empirical evidence

- Background of the Special Issue -
The emergence of new digital technologies represents a fundamental technological shift, which is also likely to impact the overall competitiveness of firms. Recent contributions have started to provide a better understanding of the salient features of new emerging digital technologies such as the Internet of Things, big data, cloud, robotics, artificial intelligence, and additive manufacturing (Martinelli et al. 2021). While most of the effort has been focused on the analysis of the impact on employment and the labour market (Graetz and Michaels, 2018), the interconnection with firms’ trade activities in the new digital framework still remains largely unexplored. This calls for further research, since the growing process of digitalization can potentially challenge both the established empirical evidence as well as the theoretical assumptions about the intertwined relationship between internationalization and the innovation activities of firms.

So far, the analyses exploring the nexus between internationalization and innovation have benefited from different theoretical strands of literature, such as the endowment theory (Wakelin, 1998), the technology-gap theory (Dosi et al. 2015) as well as the micro theory of international trade (Bernard and Jensen 1999; Melitz, 2003; Bernard et al. 2007).

From an empirical point of view, innovation, measured either as innovative inputs or innovative outputs, has been found to positively affect international activities (Ganotakis and Love, 2011; Grazzi et al., 2021). Indeed, as the international business literature underlines, innovation plays a major role in determining ownership advantages (Dunning, 1988). Also, the specific features of technology and their levels of appropriability represent a major factor behind the internalization choices of firms involved in international operations (Buckley, 2016; De Rassenfosse et al., 2022). Broadly speaking, MNE firms have become progressively more active in learning activities and as technology accumulators (Cantwell, 2017).

Not only can innovation affect international activities, but also the opposite is true. Firms engaging in international operations can become more innovative (Wagner, 2016; Fassio, 2018) due to the “learning by exporting” opportunities that arise from the access to advanced technological knowledge through linkages with foreign customers and suppliers. A process of “learning by importing” can be at work as well, triggering firms’ innovation activities by enlarging the number of suppliers and securing access to higher quality foreign inputs (e.g Goldberg et al. 2010; Aristei et al., 2013; Castellani and Fassio, 2019; Grazzi et al. 2021). Foreign direct investments are also responsible for spurring innovation activities, as FDIs may create positive spilllover effects on innovation and productivity (Griffith et al., 2006; Awate et al., 2015; Spithoven and Merlevede, 2022). All in all, this points to the fact that firms engaged in international activities, i.e. firms participating in Global Value Chains (GVCs), can also benefit in terms of innovation outcomes.

However, the intensity and effectiveness of these well-established mechanisms can be altered by the recent changes in the international context, mainly related to the spread of digital technologies. Contributions in this research area are still limited even though efforts are being made to identify the likely impacts that digitalization may have on the way firms carry out their global activities in terms of a trade-off between centripetal and centrifugal forces (Autio et al. 2022).

The literature briefly sketched above can be updated to open further avenues of research that add new perspectives on both the innovation and internationalization sides.

- Objectives and themes of the Special Issue -
This Special Issue aims to open new directions for research into the relationship between innovation and internationalization activities at the firm level. We outline below a set of themes that could add to our current understanding of the topic.

First, the direct relationship between the emergence and adoption of new technologies and firms’ internationalization paths needs to be addressed. Emerging evidence, for example, shows that technologies like 3D printing, which are also associated to the emerging “Industry 4.0 paradigm”, do not have the commonly assumed effect of reducing trade and shortening the supply chain (Freund et al. 2022); however, some of these effects can be mediated by home-country policies (Barbieri et al. 2022). The theoretical literature has evidenced that digitalization may not only have an impact through transaction costs and the higher speed and flexibility of production, but it may also alter the firms’ specific advantages (Strange and Zucchella, 2017; Banalieva and Dhanaraj, 2019).

Second, the recent empirical literature on Global Value Chains (GVC) has identified different drivers of GVC participation and its effect on firm performance through technology adoption (e.g. Delera et al. 2022), without however devoting a specific attention to the role of innovation (with a few exceptions, e.g. Reddy et al. 2021). The adoption of digital technologies, especially those of Industry 4.0, can be particularly relevant as it may impact on the effectiveness of GVC functioning, in particular with respect to the reorganization and fragmentation of innovation activities. Moreover, new dynamics have emerged in recent years, such as the regionalization of value chains (Enderwick and Buckley, 2020) or the slowdown of globalization (Witt, 2019) that may imply the shrinkage of GVCs. It is important to investigate how these processes have impacted the way innovation activities are reorganized within the global network in which firms operate (Buciuni and Pisano, 2021). This will also help understanding how innovation influences the breadth of international activities, i.e. the parallel use of different strategies (exports, FDI, licensing) to reach foreign markets. Indeed, different typologies of GVCs, in terms of governance and technological bases, may lead innovative firms to exploit their advanced technological assets through different forms of international engagement.

Third, other types of innovations that are not necessarily technology-based can also be related with international activities. So far, most studies have explored the role of technological innovation, usually distinguishing between different proxies of product and process innovations. Non-technological innovations have received comparatively less attention. Few studies have analysed other forms of innovation, such as organizational innovation, which could also foster export performance both directly and indirectly, for example by increasing the rate of technological innovation and imitation by firms (Azar and Ciabuschi, 2017). The organizational conditions in each firm may also have an important effect on the ability of firms to learn from their international operations. Also, the emergent literature on trademarks and innovation (Athreye and Fassio, 2020; Castaldi et al., 2020; Grazzi et al. 2020) has not yet analysed the relationship between these types of non-technological innovations and firms’ international activities. This seems particularly important for firms whose business model relies to a large extent on digital products, especially those that are not protected by patents. Trademarks can represent an important alternative to protect intellectual property abroad and the analysis of their use by digital firms can increase our understanding of their international strategies.

- Research Topics -
Based on the above-introduced background, suggested topics for the Special Issue include, but are not limited to, the themes listed below. We welcome, in particular, empirical contributions that use data at the firm level and engage with theories of innovation and internationalization under different perspectives.

1) New technological trends and their relationship with internationalization activities
• How is the relationship between innovation and internationalization different for firms that rely on digital technologies?
• How does digitalization change our understanding of ownership, internalization, and location advantages?
• What is the role of international engagement in the adoption of digital technologies by firms? And what are their effects in terms of firm competitiveness?
• What is the role of learning by exporting and/or learning by importing in the context of digital or Industry 4.0 technologies?

2) Global value chains, digitalization and innovation
• How does the digitalization process impact on the organization of innovation activities within GVCs?
• How does the governance of value chains affect the type of innovation introduced by digital firms?
• What is the relationship between digitalization and the different types of international activities (trade, FDI, licensing) available to firms in global value chains?
• What is the role played by digitalization in the current trend of regionalization of value chains (or slowing down of globalization)?

3) Organizational innovation, trademarks and internationalization
• What is the impact of non-technological innovations, such as organizational innovations, on the international performance of firms?
• To what extent can organizational factors at the firm level affect the ability of firms to benefit (learn) from their international operations?
• What is the relationship between new (non-technological) proxies of innovation, such as trademarks, and the presence of firms in the global markets?
• How can trademarks inform us about the international strategies of digital firms?

Submission Instructions

Important deadlines
• Submissions to the Special Issue due by 28th May
• Publication of the Special Issue in 2025

Related events
25th January 2023. Hybrid seminar hosted by CIRCLE (Lund University) to present the call for papers and raise awareness among the community of interested scholars.

Submission Process
Paper submissions will undergo rigorous editorial screening and double-blind peer review by a minimum of two recognized scholars. The standard requirements of Industry and Innovation for submissions apply. Please consult the journal submission guidelines available at