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Adaption of Digital Technologies: the Case of Latvian Firms

Author

Listed:
  • Konstantins Benkovskis

    (Latvijas Banka)

  • Styliani Christodoulopoulou

    (European Central Bank)

  • Olegs Tkacevs

    (Latvijas Banka)

Abstract

This study examines the adoption of digital technologies by Latvian firms, focusing on the factors influencing adoption decisions and the impact of these technologies on firm performance. Using firm-level responses to the digitalisation survey, the paper covers four technologies: broadband internet, webpages, web sales, and EDI sales. The results suggest that larger firms, exporters, and those employing ICT specialists along with a higher-skilled workforce, are more inlined to adopt digital technologies. The provision of relevant training programmes for both ICT and non-ICT staff is essential for fostering technology adoption, particularly for more complex systems like web sales. To assess the impact of digitalisation on firm performance, the study employs a difference- in-differences approach, finding that webpage adoption positively affects turnover and employment, particularly in the manufacturing sector. EDI sales also enhance firm performance, boosting turnover and employment. The study emphasises the need for complementary investments in workforce skills, ICT training, and organisational re-structuring to fully realise the benefits of digital transformation.

Suggested Citation

  • Konstantins Benkovskis & Styliani Christodoulopoulou & Olegs Tkacevs, 2025. "Adaption of Digital Technologies: the Case of Latvian Firms," Discussion Papers 2025/01, Latvijas Banka.
    • Handle: RePEc:ltv:dpaper:202501
    as

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    File URL: https://datnes.latvijasbanka.lv/papers/DP_1_2025_EN.pdf
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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