IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v18y2025i8p421-d1715025.html
   My bibliography  Save this article

Digital Transformation in International Trade: Opportunities, Challenges, and Policy Implications

Author

Listed:
  • Sina Mirzaye

    (Département de Management, Laval University (Université Laval), Pavillon Palasis-Prince, 2325 Rue de la Terrasse, Québec, QC G1V 0A6, Canada)

  • Muhammad Mohiuddin

    (Département de Management, Laval University (Université Laval), Pavillon Palasis-Prince, 2325 Rue de la Terrasse, Québec, QC G1V 0A6, Canada)

Abstract

This study synthesizes the rapidly expanding evidence on how digital technologies reshape international trade, with a particular focus on small and medium-sized enterprises (SMEs). Guided by two research questions—(RQ1) How do digital tools influence the volume and composition of cross-border trade? and (RQ2) How do these effects vary by countries’ development level and firm size? —we conducted a PRISMA-compliant systematic literature review covering 2010–2024. Searches across eight major databases yielded 1857 records; after duplicate removal, title/abstract screening, full-text assessment, and Mixed Methods Appraisal Tool (MMAT 2018) quality checks, 86 peer-reviewed English-language studies were retained. Findings reveal three dominant technology clusters: (1) e-commerce platforms and cloud services, (2) IoT-enabled supply chain solutions, and (3) emerging AI analytics. E-commerce and cloud adoption consistently raise export intensity—doubling it for digitally mature SMEs—while AI applications are the fastest-growing research strand, particularly in East Asia and Northern Europe. However, benefits are uneven: firms in low-infrastructure settings face higher fixed digital costs, and cybersecurity and regulatory fragmentation remain pervasive obstacles. By integrating trade economics with development and SME internationalization studies, this review offers the first holistic framework that links national digital infrastructure and policy support to firm-level export performance. It shows that the trade-enhancing effects of digitalization are contingent on robust broadband penetration, affordable cloud access, and harmonized data-governance regimes. Policymakers should, therefore, prioritize inclusive digital-readiness programs, while business leaders should invest in complementary capabilities—data analytics, cyber-risk management, and cross-border e-logistics—to fully capture digital trade gains. This balanced perspective advances theory and practice on building resilient, equitable digital trade ecosystems.

Suggested Citation

  • Sina Mirzaye & Muhammad Mohiuddin, 2025. "Digital Transformation in International Trade: Opportunities, Challenges, and Policy Implications," JRFM, MDPI, vol. 18(8), pages 1-29, August.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:8:p:421-:d:1715025
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/18/8/421/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/18/8/421/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Costa, Eric & Soares, António Lucas & de Sousa, Jorge Pinho, 2020. "Industrial business associations improving the internationalisation of SMEs with digital platforms: A design science research approach," International Journal of Information Management, Elsevier, vol. 53(C).
    2. Vicente Peñarroja & Jesús Sánchez & Nuria Gamero & Virginia Orengo & Ana M. Zornoza, 2019. "The influence of organisational facilitating conditions and technology acceptance factors on the effectiveness of virtual communities of practice," Behaviour and Information Technology, Taylor & Francis Journals, vol. 38(8), pages 845-857, August.
    3. Gary A Knight & S Tamar Cavusgil, 2004. "Innovation, organizational capabilities, and the born-global firm," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(2), pages 124-141, March.
    4. Jingsi Zhang & Liangqun Qi, 2021. "Crisis Preparedness of Healthcare Manufacturing Firms during the COVID-19 Outbreak: Digitalization and Servitization," IJERPH, MDPI, vol. 18(10), pages 1-23, May.
    5. Gary A Knight & S Tamer Cavusgil, 2004. "Innovation, organizational capabilities, and the born-global firm," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(4), pages 334-334, July.
    6. Ernesto Cassetta & Umberto Monarca & Ivano Dileo & Claudio Di Berardino & Marco Pini, 2020. "The relationship between digital technologies and internationalisation. Evidence from Italian SMEs," Industry and Innovation, Taylor & Francis Journals, vol. 27(4), pages 311-339, April.
    7. Mark Casson & Yutong Li, 2022. "Complexity in international business: The implications for theory," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(9), pages 2037-2049, December.
    8. Ozgur Dedehayir & Roland J. Ortt & Carla Riverola & Francesc Miralles, 2017. "Innovators And Early Adopters In The Diffusion Of Innovations: A Literature Review," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 21(08), pages 1-27, December.
    9. Yan-Yin Lee & Mohammad Falahat & Bik-Kai Sia, 2019. "Impact of Digitalization on the Speed of Internationalization," International Business Research, Canadian Center of Science and Education, vol. 12(4), pages 1-11, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mnahel Babgi & Benyamin Aghhavani-Shajari & Marion Vieu, 2023. "Evolution of Digitalization and Internationalization Literature: A Bibliometric and Content Analysis for Future Research Agenda," Post-Print hal-04398156, HAL.
    2. Appiah, Emmanuel Kusi & Gabrielsson, Peter & Rialp Criado, Alex, 2025. "The role of digitalization in early internationalization Research: A systematic literature review and future research directions," Journal of Business Research, Elsevier, vol. 186(C).
    3. Simba, Amon & Tajeddin, Mahdi & Farashahi, Mehdi & Dana, Léo-Paul & Maleki, Amirhossein, 2024. "Internationalising high–tech SMEs: Advancing a new perspective of open innovation," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    4. Azlina Mohamad & Adriana Mohd Rizal & Suzilawati Kamarudin & Musli Sahimi, 2022. "Exploring the Co-Creation of Small and Medium Enterprises, and Service Providers Enabled by Digital Interactive Platforms for Internationalization: A Case Study in Malaysia," Sustainability, MDPI, vol. 14(23), pages 1-24, December.
    5. Mohammad Falahat & Yan-Yin Lee & Pedro Soto-Acosta & T. Ramayah, 2021. "Entrepreneurial, market, learning and networking orientations as determinants of business capability and international performance: the contingent role of government support," International Entrepreneurship and Management Journal, Springer, vol. 17(4), pages 1759-1780, December.
    6. Crespo, Nuno Fernandes & Crespo, Cátia Fernandes & Silva, Graça Miranda & Nicola, Maura Bedin, 2023. "Innovation in times of crisis: The relevance of digitalization and early internationalization strategies," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    7. Crespo, Nuno Fernandes & Crespo, Cátia Fernandes & Silva, Graça Miranda, 2024. "Every cloud has a silver lining: The role of business digitalization and early internationalization strategies to overcome cloudy times," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    8. Luu Tien Dung & Tran Thi Hoang Dung, 2024. "Businesses model innovation: a key role in the internationalisation of SMEs in the era of digitalisation," Journal of Innovation and Entrepreneurship, Springer, vol. 13(1), pages 1-18, December.
    9. Lo, Fang-Yi & Bui, Quang-Tuan & Huarng, Kun-Huang, 2023. "The pace of international expansion for digital multinational enterprises," Technological Forecasting and Social Change, Elsevier, vol. 193(C).
    10. Oliva, Fábio Lotti & Teberga, Pedro Marins Freire & Testi, Lucas Israel Oliveira & Kotabe, Masaaki & Giudice, Manlio Del & Kelle, Peter & Cunha, Miguel Pina, 2022. "Risks and critical success factors in the internationalization of born global startups of industry 4.0: A social, environmental, economic, and institutional analysis," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    11. Zahoor, Nadia & Khan, Zaheer & Meyer, Martin & Laker, Benjamin, 2023. "International entrepreneurial behavior of internationalizing African SMEs – Towards a new research agenda," Journal of Business Research, Elsevier, vol. 154(C).
    12. Blesa, Andreu & Ripollés, María, 2021. "Critical capabilities for widening international new ventures’ geographical scope," European Management Journal, Elsevier, vol. 39(2), pages 201-213.
    13. Shaheer, Noman Ahmed & Li, Sali, 2020. "The CAGE around cyberspace? How digital innovations internationalize in a virtual world," Journal of Business Venturing, Elsevier, vol. 35(1).
    14. Abiodun Tope Samson, 2015. "The Impact of Entrepreneurial Orientation, Reconfiguring Capability and Moderation of Environmental Turbulence on Export Performance of SMEs in Nigeria," Journal of Economics and Behavioral Studies, AMH International, vol. 7(3), pages 76-87.
    15. Meschi, Pierre-Xavier & Ricard, Antonin & Tapia Moore, Ernesto, 2017. "Fast and Furious or Slow and Cautious? The Joint Impact of Age at Internationalization, Speed, and Risk Diversity on the Survival of Exporting Firms," Journal of International Management, Elsevier, vol. 23(3), pages 279-291.
    16. Lucian Belascu & Alexandra Horobet & Georgiana Vrinceanu & Consuela Popescu, 2021. "Performance Dissimilarities in European Union Manufacturing: The Effect of Ownership and Technological Intensity," Sustainability, MDPI, vol. 13(18), pages 1-19, September.
    17. Andersson, Ulf & Dasí, Àngels & Mudambi, Ram & Pedersen, Torben, 2016. "Technology, innovation and knowledge: The importance of ideas and international connectivity," Journal of World Business, Elsevier, vol. 51(1), pages 153-162.
    18. Harmancioglu, Nukhet & Grinstein, Amir & Goldman, Arieh, 2010. "Innovation and performance outcomes of market information collection efforts: The role of top management team involvement," International Journal of Research in Marketing, Elsevier, vol. 27(1), pages 33-43.
    19. Gassmann, Oliver & Keupp, Marcus Matthias, 2007. "The competitive advantage of early and rapidly internationalising SMEs in the biotechnology industry: A knowledge-based view," Journal of World Business, Elsevier, vol. 42(3), pages 350-366, September.
    20. Hélène Laurell & Leona Achtenhagen & Svante Andersson, 2017. "The changing role of network ties and critical capabilities in an international new venture’s early development," International Entrepreneurship and Management Journal, Springer, vol. 13(1), pages 113-140, March.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:18:y:2025:i:8:p:421-:d:1715025. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.