Do Digital Technologies Level the Playing Field for Internationalization From SMEs in LATAM? How Digital Technologies Have Changed Internationalization Strategies

Abstract

The research analyzes the relationship between digital transformation, measured by digital maturity level, degree of digitalization, and availability of digital tools, and the internationalization process of firms, measured by the number of countries expanded, operating and in process, and the percentage of revenue growth. The study aims to understand the important role digital transformation plays in the internationalization process in Latin America by using digital and innovative tools to increase revenue and investments. The methodology includes five dimensions composed of 42 main questions and 80 observations for each variable obtained through a qualitative method (questionnaire) and analyzed using an econometric analysis of ARDL Models with Eviews 11 for the quantitative development of the predictive model in the short and long run. The paper discusses how different variables contribute to digital transformation and the role they play in generating a successful internationalization process of firms through a causal and comparative analysis of statistical data and interpretation of the results. Also, it provides strong evidence for the validity and robustness of the final model and highlights the importance of the variables in the model. Finally, companies should invest in digital tools and aim to increase their digital maturity level to boost their revenue growth and internationalization efforts. As well, managers should work on improving the company culture to prevent it from becoming a stopper for internationalization.

Keywords: Digital Transformation, Internationalization of firms, Digital Maturity, International Expansion, Degree of Digitalization

JEL Classification: M15