A Causal Analysis on Digitalization, Sustainability and Performance: IT vs. Non-IT Firms During COVID-19

The aim of this study is to ascertain whether digitalization and sustainability engender higher revenues, by identifying the differences between IT firms vs. non-IT firms when confronted with the COVID-19 pandemic. We postulate that firms operating in fields related to information technology face different challenges and performance requirements than non-IT firms due to the disparity of technological absorption capacity, compatibility with the business model, necessary infrastructure, and also in terms of the marginal effect of growth. A quantitative analysis is conducted utilizing the Pooled Ordinary Least Squares method on a sample of companies retrieved from the Refinitiv Eikon database. The results reveal a significant positive relationship between digitalization and performance, and also sustainability and performance. Intersectoral analysis pointed out that digitalization had a significant negative impact for non-IT firms during the COVID-19 pandemic due to the critical function of digital technologies in empowering businesses to overcome adversity. Significant relationships are observed between sustainability and revenues, positive in the case of non-IT firms, and negative in the case of IT firms. The contributions of this study are relevant for companies, in the development of strategies, for scholars in deepening the research, and for policymakers in enabling the formulation of legal frameworks and the establishment of necessary infrastructure for sustainable development and digitalization.