Small Enterprises' Digital Competencies and Financial Performance

Nick Drydakis

No 17516, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In the contemporary business landscape, digital competencies have become a crucial factor for small enterprises to remain competitive and thrive. The present study examines how a business applications training, aiming to boost small enterprises' digital competencies, affects their financial performance. The business applications training took place in Greece, Cyprus, and the United Kingdom. Longitudinal data were collected between 2021 and 2023. The study revealed a positive association between digital competencies and the revenue growth rate of enterprises. Moreover, it was observed that following business applications training, the impact of digital competencies on the revenue growth rate strengthened compared to before the training. This pattern persisted across all three regions, underscoring the robustness of the estimated outcome. The study indicates that training that boosts enterprises' digital competencies could facilitate their ability to adapt to changing market conditions and stay competitive, contributing to increased financial performance. Small enterprises that develop and leverage digital competencies could be better positioned to seize growth opportunities, enhance efficiency, and adapt to the evolving business landscape.

Keywords: revenue growth; digital competencies; small enterprises; business applications; financial performance; immigrant entrepreneurship (search for similar items in EconPapers)
JEL-codes: D25 M53 O14 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2024-12
New Economics Papers: this item is included in nep-ent and nep-sbm
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Citations:

Forthcoming - forthcoming in: V. Aranitou, A. Angelakis, and M. Manioudis (eds), The Economic Impact of Small and Medium-Sized Enterprises Analytical Approaches to Growth and Innovation Challenges Amid Crises in Europe, Palgrave Macmillan, London, 2025

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