The role of digital transformation in foreign trade: The case of Turkish defence industry

In addition to the widespread developments in digital transformation, the increasing awareness of these technologies and the shift of investments by firms to this area have been the subject of research in academic studies. Many studies predict that the process of transition to digital transformation will increase the national and international performance of firms. Indeed, according to Penrose's (1959) resource-based approach, firms that adapt to innovative technologies become more competitive and therefore can be at a better level compared to their competitors. However, some studies suggest that this adaptation does not have sufficient impact on firms and that it would be healthier to develop other strategies and objectives instead of taking actions in this area. Based on the aforementioned views, this study aims to determine whether the effective use of digital transformation processes has an impact on firm and export performance, and if so, to what extent. Especially addressing this process in the defense industry, which is the application area of the study, reveals the importance of the issue not only nationally but also internationally when examined in terms of literature. As a matter of fact, although there are many studies in the context of digital transformation, empirical studies in the context of the defense industry are quite limited. In this study, structural equation modeling was applied to the data obtained from 121 companies in the defense industry in order to measure these effects. SPSS was used for reliability and frequency analysis; AMOS statistical program was used for confirmatory factor analysis, path analysis and hypothesis testing. At the same time, the current situation of the companies in the sector was analyzed with SWOT analysis. In line with the findings of the research, it has been determined that the effective use of digital transformation positively affects company and export performance, while at the same time, it has been concluded that company performance positively affects export performance. According to the results of the SWOT analysis, it was observed that the sector's greatest strength is the ability to take quick action, while its greatest weakness is the lack of personnel; growth in the main industry is the most important opportunity, while sudden changes in the exchange rate are the greatest threat. In addition, many political suggestions such as organizing awareness-raising activities for digital transformation, adding elective courses for the defence industry to the curriculum, establishing TOGG-like initiative groups for other sectors, and reducing imported value-added products are mentioned in the conclusion of the study.