The Dark Side of Digital Globalization

This article describes the dark side of digital globalization primarily in terms of its impact on the multinational enterprise (MNE). Digital assets have brought about a new kind of firm-level internationalization. Those assets operate as firm-specific advantages (FSAs) throughout the firm’s value creating processes. The dark side refers to the new challenges and costs associated with such globalization, especially those related to overestimating the non-location boundedness of FSAs and to underestimating the need to engage in novel resource recombination as a complement to the extant FSA reservoir. It demands the same attention we want to give to supposed opportunities and benefits. Our research question addresses how to achieve the desirable, balanced conceptual focus on the bright and dark sides of digital globalization, aligned with mainstream contingency thinking in international business research. We first describe the key components of the bright side, namely a higher digital intensity of the MNE’s asset base and the related FSAs supporting digital globalization. We subsequently provide an overview of the main components of the dark side. We seek with an integrative approach to stimulate scholarly dialogue about the relevant trade-offs in international business strategy.