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Introduction
Digital technology, broadly defined as advanced electronic systems, tools, software and hardware that enable the collection, storage, distribution, and analysis of large amount of data (McKinsey, 2018; United Nations, 2017; 2020a) are increasingly shaping the conduct of individuals, businesses, and societies. Some of the particularly disruptive digital technology include artificial intelligence (AI), the internet of things (IoT), additive manufacturing, robotics, business analytics, cloud-based computing, and blockchain (Agarwal, Gans, Goldfarb, 2019; Banalieva & Dhanaraj, 2019; Dachs, Kinkel & Jäger, 2019; Hudson, 2019).
Although terms like ‘the cloud’ and ‘online’ may suggest that digital technologies are not geographically anchored, such a view is not true. These technologies are physically situated in locations that provide natural cooling (Cutler, Fowers, Kramer & Peterson, 2017) and/or cheap access to energy (Greenstein & Fang, 2020; Jaeger, Lin, Grimes & Simmons, 2009). They connect users through underwater cables (Malecki & Wei, 2009) and are anchored in value chains, business processes, and end products and services where they bring often unprecedented effects on efficiency, functionality, and performance (UNCTAD, 2017; 2020). Meanwhile, the spatial embeddedness of these infrastructures has become tightly intertwined with geopolitical competition and strategic rivalry. Control over critical assets such as undersea cables, semiconductor production hubs, cloud service locations, and digital standards is increasingly contested between leading powers, notably the US and China, with significant implications for firms and states (Zhang, Zhao, Kern, Edwards & Zhang, 2023).
These geographically rooted infrastructures shape MNE strategy and create location-specific opportunities and risks. For instance, digital tools can enhance visibility into global value chains and enable new forms of cross-border coordination central to international business strategy. However, both complete automation (Lau, 2019; Raisch & Krakowski, 2020) and contracting skilled labour in developing countries (Lehdonvirta, Kässi, Hjorth, Barnard & Graham, 2018; Horton, 2010) may have unintended implications. For example, the accelerated digitalization of the workplace since the start of the pandemic has significantly reduced barriers for firms to develop a fully functioning digital workplace and as such many ‘office-based’ jobs can be offshored to locations that are less costly. Aside from these ‘office’ jobs, digitally enabled automation in production sites can lead to job losses for those working outside of the office and ‘on the ground’. Moreover, greater interconnection heightens exposure to cyber intrusions, surveillance, and politically motivated disruptions to data flows, placing digital security and control firmly on the geopolitical agenda and shaping firms’ international operations and location decisions.
In short, the transformative effects of digital technologies in different regions and countries are multifaceted and often entail both opportunities and challenges, or positive and negative consequences. These effects can play out in the locations of businesses, institutional configurations, industrial leadership, cross-border competitive dynamics, and more generally the global structure of the value chain and digitalized economy (Gregory, Henfridsson, Kaganer & Kyriakou, 2020; He, Meadows, Angwin, Gomes & Child, 2020). As digital infrastructures and capabilities are deeply embedded in national security strategies and geoeconomic competition, IB increasingly unfolds within a fragmented and politically contested digital landscape.
Digital Innovation and Emerging Economies
Historically, the conventional view was that technological leadership resided predominantly in North America and Europe (Anupama & Tallman, 2018; Bathelt & Cohendet, 2014; Beugelsdijk, McCann & Mudambi, 2010; Howells & Bessant, 2012), however the extraordinary technological lead taken by emerging economies such as China and India combined with the poor innovation record of European-based firms in recent years has presented a starkly different picture. Governments and policy makers in emerging economies have been catalysts of the rapid development of digital technology, steering its advancement and application (Dilyard, Zhao & You, 2021; McKinsey, 2020). Specifically, many governments have created a large market for local firms through procurement that, in turn, can facilitate long-term private-sector investment, as well as rolled out programmes directly to increase adoption of new technology. For example, China has emerged as a global leader as the Chinese government worked closely with technology firms that have established AI research centres (e.g., Alibaba, Baidu, and Tencent) to promote the commercialization of AI, with the aim to develop an extensive domestic AI industry. Similarly, India has put in place a “make in India” policy with a strong technological component, to encourage foreign and local firms to manufacture technological products in India. Malaysia has also formed digital free trade zones through which US$65 billion worth of goods and services are expected to flow in the period to 2025 (McKinsey, 2020). These national initiatives are not only about industrial policy but also responses to geopolitical pressures and strategic positioning in a world of intensifying techno-nationalist competition. For instance, China’s leadership in AI and digital infrastructure has been framed as part of a strategic rivalry with the US, while India’s ‘Make in India’ agenda also reflects a desire to balance foreign dependence with domestic capability-building.
Policies for stimulating startups, R&D, and global competitiveness in emerging AI technologies have been introduced by Malaysian government to promote e-governance, digital infrastructure, and entrepreneurship. This includes ‘mydigital’ blueprint that envisions a digitally driven, high-income nation with investments in data centres, cloud, and innovation ecosystems. Other countries such as Indonesia, Vietnam, and Bangladesh have developed national programmes to expand digital access, strengthen innovation ecosystems, and support firm-level digital capability building. These include, for example, 100 Smart Cities and Palapa Ring broadband infrastructure projects for improve access in remote areas of Indonesia; National Digital Transformation Program for digitizing firms and rural communities in Indonesia; and Digital strategy that focuses on ICT access, education, and women’s digital empowerment in Bangladesh. Such initiatives also shape how these countries align with, or hedge between, competing global digital ecosystems and standards, influencing their room for manoeuvre in international negotiations and alliances.
The introduction of these major digital initiatives has already resulted in shifts in the conventional patterns of technological dominance between the historical leaders and the countries that have long been at the margins of the global economy. However, empirical observations indicate that many emerging economies continue to find themselves at the peripheries of the global digital transformation and restructuring process (Graham, 2019). This may have long-lasting strategic and competitive consequences. Specifically, while in principle, digitization can potentially increase multidirectional investment and information flows; it can also promote de-globalization. Should the establishment of decentralized, regional additive manufacturing centres continue (Hannibal & Knight, 2018) or the patterns of dominance of digital leadership (e.g., China and the US) be cemented, the global digital divide may become irreversible (Ho & Tseng, 2006; Cruz-Jesus, Oliveira & Bacao, 2018; Gao, 2018). Emerging economies may experience effects resulted from shifts in global business activities and changes in geopolitical alignments, trade regimes, and technology access.
For example, the questions of changing spatial patterns of production, investments, and division of labour due to digitization are currently much discussed in the context of the geographies of global value chains (e.g., Butollo, 2020; Fuchs, 2020; Zhan, 2021; Zhao, Dilyard & Jones, 2025). However, it remains unclear whether digital technology in emerging economies will generate and thrive through network externalities. In other words, it is unclear whether the effect will be greater concentration or instead enable dispersed operations. This calls for a reconsideration of the relationships between firms where most of the technology still originates – North America and Europe. Moreover, given that digitalization is likely to affect current investment patterns, it remains to be understood how this affects or will affect those emerging economies and whether they will benefit or become further marginalized as a result of the technological and business transformations and the geopolitical contestation that accompanies them.
At the regional level, digital or digital-enabled business activities play an increasingly central role in shaping competitive positioning, innovation pathways, and regional integration. Specifically, debates and discussions in recent economic geography literature have started to pay attention to unfolding both the positive and negative implications of digital technology for cross-border business activities and regional competitive dynamics in different contexts. For example, the question of new opportunities of international market access and participation in global digital ecosystems in low-income countries has been tackled in different emerging strands of debate. One, digitization offers new opportunities for SMEs in those contexts because of increased ICT-enabled connectivity (Foster, Graham, Mann, Waema & Friederici, 2017; Hartmann, Nduru & Dannenberg, 2017). Second, new employment opportunities are created through gig-work (Anwar & Graham, 2019; Bianchi, Duran & Sandrine, 2019; Manriquez, 2019; Anwar & Graham, 2020). Third, although there is yet a clear a suitable institutional framework that can appropriately govern digital business transactions, it is known that there is co-development and co-evolution between the institutional, technological, and economic environment (Murmann, 2003; Graham, 2019). This can provide an advantage to countries that are not locked into the institutional conditions that support an already-existing technological paradigm (Cantwell, 2000) as seen by the emergence of new technologies that end up enhancing global competitiveness (e.g., semi-conductors in South Korea, Lee & Malerba, 2017).
On the negative side, several strategic and governance-related issues have emerged. These include the changing geographies of global production due to digitalization, which has accelerated reshoring and automation-driven job losses in labour-intensive manufacturing sectors in emerging economies (Butollo 2020; McKinsey, 2020). The widening digital divide between regions (UNCTAD, 2019) further affects how countries and firms participate in global value chains, shaping the internationalization trajectories of local firms and influencing their ability to attract or embed within MNEs. The rise of platform-mediated gig work also raises concerns about precarious labour conditions, algorithmic control, and the transfer of power from traditional employers to digital intermediaries (Bianchi et al., 2019; Anwar & Graham, 2020), with direct implications for how MNEs configure global labour sourcing, monitor dispersed digital workforces, and manage social responsibility across digitally extended supply chains. Additionally, the absence of appropriate regulations to safeguard digital transactions and growing political efforts to control digital technology can lead to distinct realms of digital governance with implications for the structure and functioning of economic activities in the local regions (Aaronson & Leblond, 2018). For MNEs, such regulatory divergence complicates cross-border data governance, increases compliance and coordination costs, and constrains their ability to integrate operations across subsidiaries and global value chain partners.
In short, these developments contribute to the emergence of fragmented digital spheres of influence, in which different groups of states and firms compete to set standards, control data, and shape the evolution of digital markets. This in turn fundamentally alters the strategic landscape of IB.
List of Topic Areas
Given the transformational nature of digital technology on the world economy, it is thus imperative to consider these technologies as a business and policy challenge to established IB theories and common assumptions which have been developed in an analogue era of a very different global business environment. The fundamental question that this Special Issue seeks to answer is how digital technology in emerging economies is shaping IB and MNEs amid geopolitical volatility.
We thus invite diverse theoretical and empirical studies that consider how digitization can be leveraged for IB activities associated with emerging economies to respond to opportunities and challenges that arise from digital transformation and geopolitics. Studies that draw on International Business, Innovation, Political Economy, Strategy, Business History, and Information Systems literatures (e.g., Brouthers, Geisser & Rothlauf, 2016; Banalieva & Dhanaraj, 2019; Chen, Shaheer, Yi & Li, 2019) to offer interdisciplinary lens to explore the nexus of digital technologies, large and small MNEs, and geopolitics and public policy, with a specific focus on the emerging-economy context.
We particularly welcome studies that examine the geopolitical dimensions of MNEs in digital transformation. Geopolitical tensions influence the governance of cross-border data flows, the regulation of digital trade, and the strategic decisions of MNEs in the region. Understanding these dynamics is critical for theorizing how MNEs strategize, behave, respond, and performance to digital transformation which shapes and is shaped by shifting interstate power relations. We accept conceptual, qualitative, and quantitative methodological papers to address the key questions this Special Issue asks. It is our intention that final selected studies included in this Special Issue will make significant contributions to theoretical and empirical understanding of digital technologies, geopolitics, and IB by leveraging the emerging-economy context. These studies together shall initiate and shape a key conversation in this area.
In this call, we are particularly (though not exclusively) interested in studies that relate to the following five broad research themes: 1. Digital platforms and MNE innovation strategy; 2. Digital technological innovation and MNE subsidiaries; 3. Digital infrastructure and firm internationalization; 4. Digital ecosystems and MNEs; 5. Digital sovereignty and MNE strategy. We discuss them in more details next.
The Five Main Themes
Theme 1: Digital platforms and MNE innovation strategy
The role of proximity in innovation has been extensively explored in the literature, traditionally viewed as essential for collaboration, knowledge sharing, and trust-building among innovators (Boschma & Frenken, 2010; Ozman, 2009). Proximity has historically facilitated networking within innovation systems, often discussed in the context of clusters and agglomeration (Carbonara, 2004; Oyeyinka and McCormick, 2007). While this proximity-centred approach has proven effective in many developing countries, the rise of digital technologies has called into question the necessity of physical proximity, especially for MNEs that operate across dispersed geographies.
Digital platforms and online networks now allow firms to tap into a global pool of knowledge, reducing the need for geographical proximity. This shift is particularly relevant to MNEs that traditionally relied on physical clusters to access innovation networks. For MNEs, the "death of distance" enabled by digital tools could transform how they innovate, engage with local markets, and access knowledge in emerging economies. However, there is limited understanding of whether digital proximity can fully substitute for physical proximity in fostering MNE innovation and performance, especially in markets where digital infrastructures vary widely.
This gap highlights a crucial area for further research: understanding the evolving role of proximity - both physical and digital - in MNE innovation strategies within emerging markets. Specifically, there is a need to examine how MNEs can leverage digital technologies to foster internetworking, enabling knowledge flows across borders and enhancing connectivity with local and global innovation ecosystems. In emerging economies, where many firms are undergoing rapid digital transformation, understanding how MNEs adapt to these dynamics could provide valuable insights into optimizing digital and physical networks for innovation.
We call for research to contribute to the limited insights on the implications of digital transformation for MNE innovation, particularly within developing economy context. As MNEs increasingly rely on digital networks, a deeper understanding of how proximity - redefined through digitalization - affects their strategies and performance in emerging economies is essential. This research should offer significant insights for both MNE strategy and policy recommendations, guiding digital transformation to maximize innovation and growth potential across emerging economies.
Theme 2: Digital technology and MNE subsidiaries
Recent discussions concerning MNE subsidiary management have highlighted gaps in understanding how technological shifts, particularly the rise of the digital economy, are transforming the roles and structures of MNE subsidiaries (Meyer, Li, and Schotter, 2020). As digital transformation reshapes global business, there is an urgent need to explore how it impacts MNE subsidiaries, especially in emerging markets. This includes examining the digital transformation journeys of MNE subsidiaries in these markets and how digitalization leads not only to reshoring or back-shoring but to a fundamental reorganization of MNE operations and a new geography of international functions.
Traditionally, subsidiary research has classified subsidiaries based on typologies developed before the digital era. The widely used classifications by Birkinshaw and Morrison (1995) - global mandate, specialized contributor, and local implementer - have been central to understanding subsidiary roles. However, these frameworks may no longer capture the complexities of MNE operations in a digital world. Digitalization is enabling new configurations, questioning the relevance of the ‘host-country subsidiary’ model and creating a need for fresh insights into the roles and positioning of subsidiaries.
Digital transformation allows MNEs to pursue strategies such as informational and functional integration, servitization, and relocation. These strategies alter how subsidiaries coordinate with headquarters, redefine their roles, and influence where functions are located globally. However, the specific mechanisms through which digitalization impacts MNE structure, particularly in emerging markets, remain under-researched. Existing studies often overlook the gradual, evolutionary changes that occur within subsidiaries, a perspective that Meyer et al. (2020) identified as essential for understanding digital transformation.
We call for research that can take an evolutionary process approach to uncover how digital transformation is fragmenting subsidiaries into specialized subunits. Early findings suggest that the traditional host-country subsidiary model may be obsolete, as digitalization enables MNEs to create transnational, regionally integrated networks. In this new model, subsidiaries are configured based on factors such as technological capabilities, workforce quality, and country-level risks, rather than strictly by geographical mandates. It is essential for scholarly efforts to expand on these preliminary findings and understand how digital transformation is redefining the structure and coordination of MNEs across emerging economies.
Theme 3: Digital infrastructure and firm internationalization
Digital technologies are increasingly attracting substantial investments by governments in emerging economies, with the expectation that improving national digital infrastructures will enhance the competitiveness of MNEs operating in these regions. By leveraging digital environments, MNEs could engage more effectively in global knowledge flows, connect with suppliers and customers worldwide, and pursue an array of internationalization activities such as exporting, market entry, international collaborations (Luo, 2022). However, there is limited understanding of the conditions under which these digital environments truly support the global competitiveness of MNEs in emerging economies, particularly with respect to different modes of internationalization such as exporting, FDI, strategic alliances, and platform-based international expansion. This gap signals a critical area for further research.
Although prior studies have examined the embeddedness of emerging-economy firms within their institutional contexts, the impact of diverse digital environments on the relationship between firm capabilities and internationalization outcomes remains underexplored. We propose that digital and innovative capabilities can significantly enhance multiple internationalization pathways for MNEs. However, weaker national digital environments may reduce MNEs' abilities to engage in global knowledge flows and limit their reach to potential customers abroad. This poses a unique challenge for MNEs seeking to maintain competitive advantage in emerging markets with limited digital infrastructure. Moreover, MNEs operating in less favourable digital environments may overcome these challenges by developing robust internal digital capabilities, potentially compensating for deficiencies in the national infrastructure. This potential substitution effect of firm-specific capabilities for weak digital environments merits deeper investigation across different internationalization modes, from FDI to digital platform expansion.
We call for scholarly efforts that can provide new insights into how the interplay between MNE capabilities and national digital environments influences global competitiveness in emerging economies. By examining these dynamics, we hope to offer valuable implications for managers and policymakers, contributing to strategies that bolster international competitiveness for MNEs in diverse digital landscapes. This strand of research could guide MNEs in building resilient capabilities to succeed in varying digital contexts and inform government efforts to enhance digital infrastructures in support of different internationalization ambitions.
Theme 4: Digital ecosystems and MNEs
Geopolitical fragmentation and competition for technological leadership are giving rise to distinct regional digital ecosystems such as US-led, China-led, India-led and EU-led digital spheres of influence. These digital blocs increasingly shape how MNEs operate, innovate, and form strategic alliances in emerging economies. Yet, limited research has examined how MNEs navigate overlapping or competing digital standards, regulatory regimes, and ecosystem architectures across regions (Luo, 2022).
Most existing studies frame digital ecosystems through a North American or European lens, emphasising high-tech productivity and connectivity (Nambisan, Zahra & Luo, 2019). However, this perspective often overlooks how emerging economies are becoming arenas where competing digital ecosystems (e.g., cloud infrastructures, platform architectures, AI governance frameworks, and data regimes) intersect and clash. Understanding how MNEs operate within these contested ecosystems is increasingly central to IB scholarship. Future research should explore how MNEs navigate and leverage these competing digital spheres of influence, including selecting partners, aligning with standards, localising technologies, and managing political risk across regions with divergent geopolitical alignments (Meyer, Li & Brouthers, 2023).
Understanding how geopolitical and spatial contexts drive digital ecosystem formation is crucial. For instance, the expansion of China’s Digital Silk Road, the rise of India’s sovereign digital infrastructure, and the EU’s push for regulatory influence (e.g., GDPR, AI Act) reflect the emergence of distinct blocs that MNEs must strategically navigate. As digital trade becomes increasingly politicised, research is needed to reveal how MNEs can build strategies that bridge or operate across these competing digital regimes, manage ecosystem lock-in risks, and respond to shifting regional alliances. This line of inquiry has significant potential to reshape traditional IB theory by highlighting how geopolitical alignment, rather than demographic change, structures the evolution of digital ecosystems and MNE strategy (Witt, 2019).
Theme 5: Digital sovereignty and MNE strategy
Geopolitical rivalries are becoming central to the governance of digital technologies, and many emerging economies are at the heart of this transformation. The ongoing US-China technology competition exemplifies how access to semiconductors, AI, cloud services, and digital platforms is increasingly politicized, with profound implications for firms operating in the region. Trade wars, technology sanctions, and competing standards (e.g., for 5G, data protection, cybersecurity, and AI ethics) create fragmented digital ecosystems, forcing MNEs to adapt their strategies to multiple, and often conflicting, regulatory and institutional frameworks (Han, Lukoianove, Zhao & Liu, 2024).
Digital sovereignty is emerging as a policy priority, with governments enacting regulations on data localization, digital taxation, and cybersecurity to assert control over digital infrastructures and value chains. For firms, this creates both opportunities and challenges. On one hand, compliance with sovereign digital regimes may offer privileged market access; on the other, it imposes costs of regulatory adaptation and raises the risk of exclusion from global value chains if firms become locked into one geopolitical bloc. The role of regional agreements is also crucial. Initiatives such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) include provisions on digital trade, but these coexist with divergent national approaches and global disputes at the WTO. MNEs must develop strategies that account for this institutional patchwork while managing risks of supply chain disruption, restricted technology transfer, or bifurcated digital standards.
For IB research, these developments raise key questions: 1) How do geopolitical tensions shape MNEs’ location strategies, investment decisions, and digital innovation pathways in emerging economies? 2) In what ways are emerging-economy states leveraging digital sovereignty to position themselves between competing global powers? 3) How do firms balance the risks of alignment with one ecosystem (e.g., US-led vs China-led) against the benefits of engaging with multiple digital blocs? 4) What strategies are MNEs employing to ensure resilience in a world of contested digital infrastructures and fragmented standards? We call for theoretical and empirical research that addresses these issues at the intersection of geopolitics, international business, and digital transformation. Contributions could draw from international political economy, global strategy, business history, and innovation studies to advance a deeper understanding of how geopolitical contestation shapes the trajectories of digital innovation and international business in emerging economies. This theme invites work that highlights both firm-level responses and state-level strategies, offering insights into the evolving global order in the digital age.
Submissions Information
Submissions are made using ScholarOne Manuscripts. Registration and access are available at: https://mc.manuscriptcentral.com/tmbr
Author guidelines must be strictly followed. Please see: https://www.emeraldgrouppublishing.com/journal/mbr
Authors should select (from the drop-down menu) the special issue title at the appropriate step in the submission process, i.e. in response to “Please select the issue you are submitting to”.
Submitted articles must not have been previously published, nor should they be under consideration for publication anywhere else, while under review for this journal.
Key Deadlines
Opening date for manuscripts submissions: 01/07/2026
Closing date for manuscripts submission: 30/11/2026
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