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Digitalization and trade participation of SMEs

Author

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  • Dolores Añón Higón

    (Universitat de València)

  • Daniel Bonvin

    (Universitat de València)

Abstract

This study examines the impact of digitalization on the participation of small and medium-sized enterprises (SMEs) in export and import activities. Using data on Spanish manufacturing SMEs from 2001 to 2014, we construct a multidimensional firm-level index of digitalization. We then estimate a set of dynamic models analyzing the direct and indirect (via total factor productivity) effects of digitalization on firms’ export and import strategies. We find evidence that firms’ digitalization positively influences the probability of exporting and importing, both directly and through productivity. We find that productivity has a stronger impact on SMEs’ trade behavior than the direct channel of digitalization. A one standard deviation increase in the digitalization index increases the probability of exporting and importing by 1.5 and 0.8 percentage points, respectively, while the same increase in the logarithm of productivity has a three times greater effect for exporting and nine times greater for importing.

Suggested Citation

  • Dolores Añón Higón & Daniel Bonvin, 2024. "Digitalization and trade participation of SMEs," Small Business Economics, Springer, vol. 62(3), pages 857-877, March.
    • Handle: RePEc:kap:sbusec:v:62:y:2024:i:3:d:10.1007_s11187-023-00799-7
    DOI: 10.1007/s11187-023-00799-7
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