COVID-19 Crisis, Digitalization and Localization Decisions

Abstract

In February 2020, Covid-19 health crisis severely hit Italy and then spread around the world. To contrast the spreading of the virus, the whole country was initially forced in a strict lockdown, with people closed in their houses and companies shutting down their activities. Although the spread of vaccinations is slowly bringing back a sort of normality, the crisis has immediate and long-term effects. Moreover, it has shown the vulnerabilities of managing businesses on a global scale, alerting internationalizing firms about the necessity to adapt their strategic asset to face the next crisis. This chapter aims at stimulating reflections on the potential interactions among the Covid-19 crisis, digitalization and the localization decisions. Through quantitative and qualitative data related to Italian internationalizing firms, this research shows that, thanks to digitalization, value chain activities localized abroad are expected to become more geographically concentrated, while headquarters perform stronger control and coordination activities on less autonomous business functions abroad. Drawing on in-depth interviews, companies reconsidered their long-term strategies, showing that some reactions to the crisis may suggest potential rising trends in specific industries.

Citation

Romanello, R. and Veglio, V. (2022), "COVID-19 Crisis, Digitalization and Localization Decisions", van Tulder, R., Verbeke, A., Piscitello, L. and Puck, J. (Ed.) International Business in Times of Crisis: Tribute Volume to Geoffrey Jones (Progress in International Business Research, Vol. 16), Emerald Publishing Limited, Leeds, pp. 253-271. https://doi.org/10.1108/S1745-886220220000016013