Digitalisation, Data Governance, and Cross-Border Commerce: New Directions for International Business Theory

Abstract

Digitalisation has become a defining force in contemporary international business, reshaping how firms create value, access foreign markets, and coordinate cross-border activities. As digital technologies enable new forms of virtual internationalisation, platform-based global engagement, and data-driven decision-making, they challenge long-standing assumptions embedded in classical international business (IB) theory. At the same time, the rise of national and regional data governance regimes—encompassing data localisation laws, privacy regulations, and cybersecurity frameworks—introduces new institutional complexities that directly influence the feasibility and effectiveness of digitally enabled global expansion. This conceptual paper examines how the interaction between digitalisation, data governance, and cross-border digital trade mechanisms reshapes the logic of internationalisation in the digital era. Drawing on insights from digital trade research, institutional perspectives, and technology-enabled internationalisation literature, the paper develops an integrated conceptual framework that positions Global Market Expansion Capability (GMEC) as a contemporary outcome of digital-era globalisation. GMEC captures the digitally enabled agility with which firms identify, access, and scale across foreign markets under varying institutional conditions. The paper contributes to IB theory by explaining how digital capabilities, digital regulatory complexity, and digitally mediated trade pathways jointly determine international expansion patterns. Directions for future research are proposed to guide empirical validation and theoretical refinement.