This study investigates how geopolitical decoupling between digital platform-based exporters’ (DPEs) home country and a rival nation influences their performance in third-party host countries. Drawing on signaling theory, we propose that bilateral geopolitical disruptions act as negative signals to foreign customers, undermining perceptions of DPEs’ capabilities and reliability, even in markets uninvolved in the conflict. Additionally, we explore how DPEs can utilize two context-specific platform signals—platform-verified signals based in home country, certified by home country platform owners, and platform-generated signals based in rival country, derived from prior transaction experience in rival country—to mitigate these adverse effects, and examine their varying effectiveness based on institutional distance. Analyzing data from 5,624 Chinese DPEs on Alibaba.com during the US-China trade war, our analysis reveals negative spillover effects on DPE performance in host countries and demonstrates the mitigating role of platform signals. Moreover, the effectiveness of two types of platform signals depends on the institutional distance between the host country and the two conflicting countries. Our study contributes to research on digital platform-based exporting, geopolitical decoupling, and signaling theory perspective, and offers new insights into DPEs’ resilience amid geopolitical uncertainty.
