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Our study is the first to empirically analyze the nonlinear relationship between digitalization and export value and diversification. This paper measures the digital transformation process in terms of digital connectivity, uses of the internet, e-business, e-commerce, and e-government. The various econometrics techniques are applied for the database of 23 European countries during the period 2015–2020. The vital findings should be conveyed here. First, the bottlenecks of export values could be resolved by promoting digital transformation. However, the non-linear reverted U-shaped relationship between digitalization and export diversification suggests that positive effects only appear when the digital activities, especially in digital connectivity, humans with digital skills, use of internet services, or digital public services reaches a certain threshold. Second, the positive influence of digitalization on exports stems from a reduction in export cost and export time to deal with documentary and border compliance as well as improvements in competence and quality of logistic services and quality of trade and transport-related infrastructure, thus enhancing exports. Third, the role of digital connectivity and the integration of digital technology into business and commerce become especially important for export diversification.

Transfer pricing or the manipulation of transfer prices is to set the price of intra-firm transactions different from market prices in order to shift incomes from high-tax locations to low-tax ones. Hence, a multinational corporation can decrease its global tax burden. The study applies the model of transfer pricing incentive of Swenson (2001) by employing generalised method of moments (GMMs) to examine the effect of income tax rate and tariff rates on the setting of transfer prices in ten commodity groups of multinationals operating in Vietnam during the period of 2008-2013. The study concludes a positive correlation between changes of transfer pricing incentives and changes of reported transfer prices. Furthermore, the findings also show that increases in Vietnamese income tax rate lead to decreases in income tax rate in the headquartered country of parent firms, or Vietnamese tariff rate. Additionally, the level of reported transfer prices of imports from the parent firm to its affiliates in Vietnam will increase the majority of investigated commodity groups (except motor vehicles).