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Online sales adoption and financial resilience in Sub-Sahara Africa: the moderating role of ownership and enterprise size during Covid-19 crisis

Joseph Ato Forson (), Samuel Gameli Gadzo (), Emmanuel Atta Anaman () and Abass Adams ()
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Joseph Ato Forson: University of Education, Winneba
Samuel Gameli Gadzo: University of Education, Winneba
Emmanuel Atta Anaman: University of Education, Winneba
Abass Adams: University of Education, Winneba

Future Business Journal, 2022, vol. 8, issue 1, 1-10

Abstract: Abstract It is an established fact that the Covid-19 pandemic had a persistent economic uncertainty effect than health uncertainty. In this study, the researchers examined the effects of expanding sales online on the financial resilience of enterprises in sub-Sahara Africa (SSA) during the economic downturn. The researchers measured financial resilience by the extent of sales and cash-flows decline during the pandemic. The researchers collected 4751 unweighted data from the World Bank’s Enterprise Survey and it Covid-19 follow-up survey. Findings from the bivariate probit model and the predictive margin probabilities showed that most enterprises in SSA adopted or expanded proportion of sales online during the pandemic. Increasing the proportion of online sales exerted a decreasing effect on sales and cash-flow declines and thus improved financial resilience at a threshold of 40% during the pandemic. Large enterprises were observed to be more resilient than small and medium enterprises, yet domestic and foreign enterprises had the same level of financial resilience during the pandemic. For enterprises in Africa to realise the 40% threshold of online sales, the researchers encourage enterprises to invest in advertisement for product legitimacy.

Keywords: Covid-19 pandemic; Enterprise size; Financial resilience; Online sales; Ownership type; Digital economy (search for similar items in EconPapers)
JEL-codes: H12 L25 O33 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1186/s43093-022-00154-4

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