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Digital adoption and productivity: understanding micro drivers of the aggregate effect

Author

Listed:
  • Natália Barbosa

    (Universidade do Minho)

  • Ana Paula faria

    (Universidade do Minho)

Abstract

Digital technologies have the scope to engender positive effects on productivity at firm and aggregate level. However, empirical evidence and theoretical contributions are ambiguous as mixed findings and diverse explanations have been put forward. We use a rich and representative sample of Portuguese firms over the period 2014-2019 to empirically assess the relationship between digital technologies adoption and productivity. Based on estimations over the entire distribution of firm’s productivity, we find that heterogeneous digital technologies affect differently the dynamics of productivity and the convergence to the frontier. This leads to mixed findings with scope to diverse impact in the aggregate productivity. Moreover, positive and significant effects on productivity require an upgrading on the degree of sophistication and complementarity among digital technologies and benefit from the ability of firms to interact and learn with digitalised peers in the same industry.

Suggested Citation

  • Natália Barbosa & Ana Paula faria, 2022. "Digital adoption and productivity: understanding micro drivers of the aggregate effect," GEE Papers 0162, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jun 2022.
    • Handle: RePEc:mde:wpaper:0162
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    File URL: https://www.gee.gov.pt//RePEc/WorkingPapers/GEE_PAPERS_162.pdf
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    References listed on IDEAS

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    Cited by:

    1. João Amador & Cátia Silva, 2023. "A view on ICT and digitalization in Portuguese firms," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.

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    More about this item

    Keywords

    Digital technologies; Productivity; Spillover effects;
    All these keywords.

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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