Inside out: The interplay between institutions and digital technologies for SMEs performance

David Urbano Pulido, Sebastian Aparicio, Stephanie Scott, Diego Martinez Moya

Research output: Contribution to journalArticleResearchpeer-review

2 Citations (Scopus)

Abstract

An effective digital strategy provides multifaceted benefits for firms of all sizes, including operational oversight, learning, and effective market interactions. Yet, despite the burgeoning evidence that digitalization provides essential resources for firms, disparate observations on the link between SME performance and digitalization across regions are noted in the literature. There remain concerns about whether SMEs enact effective digital strategies to reap the rewards, especially given that some SMEs have reported entirely forgoing digital activities due to resource constraints and exogenous forces in the market. In light of the varying global observations, it is crucial to understand how regional and multi-layered institutional settings influence SMEs to adopt, implement, and utilize digital resources to form solid policies and appropriate facilitative mechanisms. Therefore, this study compiled 11,485 observations of SME digital activities and performance from 88 distinctive institutional regions within Latin America and the Caribbean from 2006 to 2018. The study used data from the World Bank’s Enterprise Survey (WBES) and World Development Indicators (WDI) to reveal various institutional factors influencing SMEs’ adoption of technologies and subsequent performance via multilevel regressions. The findings suggest institutional barriers become insignificant when firms use digital technologies and suggest that it may insulate SMEs from exogenous shocks.
Original languageEnglish
Pages (from-to)162-181
Number of pages20
JournalEntrepreneurship and Regional Development
Volume36
Issue number1-2
DOIs
Publication statusPublished - 1 May 2023

Keywords

  • Digital technology
  • Latin America and the Caribbean
  • institutions
  • multilevel analysis
  • regional context
  • total factor productivity

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