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Online sales adoption and financial resilience in Sub-Sahara Africa: the moderating role of ownership and enterprise size during Covid-19 crisis

Author

Listed:
  • Joseph Ato Forson

    (University of Education, Winneba)

  • Samuel Gameli Gadzo

    (University of Education, Winneba)

  • Emmanuel Atta Anaman

    (University of Education, Winneba)

  • Abass Adams

    (University of Education, Winneba)

Abstract

It is an established fact that the Covid-19 pandemic had a persistent economic uncertainty effect than health uncertainty. In this study, the researchers examined the effects of expanding sales online on the financial resilience of enterprises in sub-Sahara Africa (SSA) during the economic downturn. The researchers measured financial resilience by the extent of sales and cash-flows decline during the pandemic. The researchers collected 4751 unweighted data from the World Bank’s Enterprise Survey and it Covid-19 follow-up survey. Findings from the bivariate probit model and the predictive margin probabilities showed that most enterprises in SSA adopted or expanded proportion of sales online during the pandemic. Increasing the proportion of online sales exerted a decreasing effect on sales and cash-flow declines and thus improved financial resilience at a threshold of 40% during the pandemic. Large enterprises were observed to be more resilient than small and medium enterprises, yet domestic and foreign enterprises had the same level of financial resilience during the pandemic. For enterprises in Africa to realise the 40% threshold of online sales, the researchers encourage enterprises to invest in advertisement for product legitimacy.

Suggested Citation

  • Joseph Ato Forson & Samuel Gameli Gadzo & Emmanuel Atta Anaman & Abass Adams, 2022. "Online sales adoption and financial resilience in Sub-Sahara Africa: the moderating role of ownership and enterprise size during Covid-19 crisis," Future Business Journal, Springer, vol. 8(1), pages 1-10, December.
    • Handle: RePEc:spr:futbus:v:8:y:2022:i:1:d:10.1186_s43093-022-00154-4
    DOI: 10.1186/s43093-022-00154-4
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    References listed on IDEAS

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    1. Øystein Moen & Lars Jaako Havro & Einar Bjering, 2017. "Online consumers reviews: Examining the moderating effects of product type and product popularity on the review impact on sales," Cogent Business & Management, Taylor & Francis Journals, vol. 4(1), pages 1368114-136, January.
    2. Nerine Mary George & Vinit Parida & Tom Lahti & Joakim Wincent, 2016. "A systematic literature review of entrepreneurial opportunity recognition: insights on influencing factors," International Entrepreneurship and Management Journal, Springer, vol. 12(2), pages 309-350, June.
    3. Duch-Brown, Néstor & Grzybowski, Lukasz & Romahn, André & Verboven, Frank, 2017. "The impact of online sales on consumers and firms. Evidence from consumer electronics," International Journal of Industrial Organization, Elsevier, vol. 52(C), pages 30-62.
    4. Zhen Peng & Yujun Lian & Joseph A. Forson, 2021. "Peer effects in R&D investment policy: Evidence from China," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 4516-4533, July.
    5. Robert Wentrup, 2016. "The online–offline balance: internationalization for Swedish online service providers," Journal of International Entrepreneurship, Springer, vol. 14(4), pages 562-594, December.
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    Cited by:

    1. Uma Shankar Yadav & Ravindra Tripathi & Mano Ashish Tripathi, 2022. "Adverse impact of lockdown during COVID-19 pandemic on micro-small and medium enterprises (Indian handicraft sector): A study on highlighted exit strategies and important determinants," Future Business Journal, Springer, vol. 8(1), pages 1-10, December.

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    More about this item

    Keywords

    Covid-19 pandemic; Enterprise size; Financial resilience; Online sales; Ownership type; Digital economy;
    All these keywords.

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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