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Do digitalization spurs SMEs’ participation in foreign markets?

Author

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  • Dolores Añon Higón

    (Department of Applied Economics II and ERI-CES, Faculty of Economics, Universitat de València, Avda. Tarongers, s/n, 46022 Valencia (Spain).)

  • Juan A. Daniel Bonvin

    (Department of Applied Economics II, Faculty of Economics, Universitat de València, Avda. Tarongers, s/n, 46022 Valencia (Spain).)

Abstract

This study aims to empirically examine the impact of the digital transformation on the participation of small and medium-sized enterprises (SMEs) in export and import activities. In this regard, empirical evidence at the firm level is very limited. Using a representative panel of Spanish SMEs from 2001 to 2014, we contribute to the literature by constructing a multidimensional index of digitization at the firm level and estimating a set of dynamic models analyzing the direct and indirect (via total factor productivity) effects of the digital transformation on SMEs’ export and import strategies. Overall, our results show that firm decisions to export and import are simultaneously determined. Moreover, the firms’ degree of digitalization positively influences the probability to export and import, both directly and indirectly through TFP. The direct effect seems to be larger for exports than for imports, while the opposite seems true for the indirect effect.

Suggested Citation

  • Dolores Añon Higón & Juan A. Daniel Bonvin, 2023. "Do digitalization spurs SMEs’ participation in foreign markets?," Working Papers 2307, Department of Applied Economics II, Universidad de Valencia.
    • Handle: RePEc:eec:wpaper:2307
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    Keywords

    Exports; Imports; Digital transformation; SMEs; Productivity.;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • 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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