The role of product digitization for productivity

Torben Schubert, Sajad Ashouri, Matthias Deschryvere, Angela Jäger, Fabiana Visentin, Scott Cunningham, Arash Hajikhani, Lukas Pukelis and Arho Suominen

No 2023-004, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: Digitalization is considered an important driver of the unravelling societal and economic transformations. However, holding both promises and challenges, its effects on the performance of individual firms are still underexplored. In this paper, we recognize that digitalization may take many shapes and try isolating the effects specifically of product digitization on firm level labour productivity. Our analyses are based on a large Europe-wide unique dataset combining structured information from ORBIS and PATSTAT with novel web-scraped information on digitalization in firms involved in high-tech manufacturing. We show that digitalization benefits productivity. However, the effect appears to result exclusively from product digitization, while a general digital intensity measure turned out to be insignificant. Moreover, we show that the effects are stronger for firms with higher initial productivity and firms located in countries considered digitally leading. Our results from the European high-tech sector suggest that the digital transformation in Europe is slow paced and scaled-up in only a fraction of the firms.

JEL-codes: C81 D20 O33 O47 O49 (search for similar items in EconPapers)
Date: 2023-02-14
New Economics Papers: this item is included in nep-bec, nep-eec, nep-eff, nep-eur, nep-ino, nep-pay, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2023004

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