Does Digitalization Matter? Evidence from Egyptian and Jordanian Firms

Generally, digitalized firms are more productive, more likely to export, and more likely to rely skilled labor. This paper thus analyzes the effect of digitalization on firms’ performance (measured by exports and sales) and labor characteristics (measured by female workers, unpaid workers, parttime workers and workers with permanent contract). To do so, I rely on a newly collected dataset that focuses on firms’ digitalization. I use variables related to digitalization (whether the firm has a website or not, uses smartphones or not, online selling and buying, the Internet, is listed on an application and self-built sales website that enables online payments). The main findings show that the results are more robust for labor characteristics than for performance variables. Indeed, while, in Egypt, digitalization is associated to more women, less unpaid workers and more workers with permanent contract, the result is less robust for sales and exports. Yet, for sales, the use of the Internet is significant in both Egypt and Jordan. Listing the firm on an application is positively associated to sales in Egypt but not in Jordan. In terms of exports, self-built websites for payments in Egypt and using Internet in Jordan are significant.