Digitalization intensity and its impact on financial performance: The role of scalable platforms

Roberto Moro-Visconti, Javier Sánchez García, Joaquín López Pascual and Salvador Cruz Rambaud

Finance Research Letters, 2025, vol. 74, issue C

Abstract: This research investigates the impact of digital platforms on financial and economic outcomes, emphasizing EBITDA, market capitalization, and the capacity for debt financing. The research illustrates that digital platforms enhance revenue streams while simultaneously decreasing operational expenditures, thereby leading to an overall enhancement in financial performance. Utilizing a dynamic panel data methodology, the results demonstrate the temporal impacts of digital platforms on key financial indicators. Furthermore, it explores the complex interplay between digital intensity and marginal benefits, offering practical ideas for companies seeking to enhance both scalability and funding opportunities. By analyzing differing levels of digital intensity, we illustrate how scalability influences financial margins and market capitalization. The results imply that organizations adopting digital platforms are more inclined to secure long-term economic viability and financing capability through improved efficiencies in data processing and strategic decision-making. However, investing in digitalization has an optimal point from where it shows diminishing returns.

Keywords: EBITDA; Digital intensity; Discounted cash flows; Market valuation; Return on sales (search for similar items in EconPapers)
JEL-codes: G21 G31 G32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:74:y:2025:i:c:s1544612325000376

DOI: 10.1016/j.frl.2025.106772

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