Digital orientation under global trade tensions: evidence from agrifood sector in Europe

Purpose This study investigates whether digital orientation enhances the resilience of European agrifood firms to geopolitical shocks, focusing on the 2025 US tariffs under US President Trump’s second administration. The study examines whether digital capabilities may serve as strategical corporate device to preserve market value and weather the storm of unexpected trade disruptions. Design/methodology/approach The study employs an event study methodology to analyze the stock market reactions of publicly listed European agrifood firms in response to the US tariff announcement. It tests whether firms with stronger digital orientation, proxied by the frequency of digital-related keywords in the firm’s annual report, were more resilient to the increased uncertainty prompted by the US tariffs policy shock. Findings The results reveal a non-linear relationship between digital orientation and corporate resilience. Indeed, firms with higher digital maturity showed significantly less negative stock reactions. This evidence suggests that advanced digital capabilities signal to investors firms’ adaptability. In contrast, a superficial commitment to digital adoption fails to mitigate market losses. Originality/value This article contributes to the literature by underlining the mitigating role of digital orientation as a dynamic capability, enhancing firm resilience. It provides novel empirical evidence linking digitalization and firm-level adaptation under trade shocks and highlights the importance of digital capabilities as a strategic device to support corporate resilience during periods of geopolitical tensions.