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Inside out: The interplay between institutions and digital technologies for SMEs performance

Urbano, David; Aparicio, Sebastian; Scott, Stephanie; Martinez-Moya, Diego

Authors

David Urbano

Sebastian Aparicio

Diego Martinez-Moya



Abstract

An effective digital strategy provides multifaceted benefits for firms of all sizes, including operational oversight, learning, and effective market interactions. Yet, despite the burgeoning evidence that digitalization provides essential resources for firms, disparate observations on the link between SME performance and digitalization across regions are noted in the literature. There remain concerns about whether SMEs enact effective digital strategies to reap the rewards, especially given that some SMEs have reported entirely forgoing digital activities due to resource constraints and exogenous forces in the market. In light of the varying global observations, it is crucial to understand how regional and multi-layered institutional settings influence SMEs to adopt, implement, and utilize digital resources to form solid policies and appropriate facilitative mechanisms. Therefore, this study compiled 11,485 observations of SME digital activities and performance from 88 distinctive institutional regions within Latin America and the Caribbean from 2006 to 2018. The study used data from the World Bank’s Enterprise Survey (WBES) and World Development Indicators (WDI) to reveal various institutional factors influencing SMEs’ adoption of technologies and subsequent performance via multilevel regressions. The findings suggest institutional barriers become insignificant when firms use digital technologies and suggest that it may insulate SMEs from exogenous shocks.

Citation

Urbano, D., Aparicio, S., Scott, S., & Martinez-Moya, D. (2023). Inside out: The interplay between institutions and digital technologies for SMEs performance. Entrepreneurship and Regional Development, https://doi.org/10.1080/08985626.2023.2208555

Journal Article Type Article
Acceptance Date Apr 24, 2023
Online Publication Date May 1, 2023
Publication Date 2023
Deposit Date May 3, 2023
Publicly Available Date Mar 29, 2024
Journal Entrepreneurship and Regional Development
Print ISSN 0898-5626
Electronic ISSN 1464-5114
Publisher Taylor and Francis Group
Peer Reviewed Peer Reviewed
DOI https://doi.org/10.1080/08985626.2023.2208555
Public URL https://durham-repository.worktribe.com/output/1173568

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