Determinants of the Adoption of Digital Technologies in South African Manufacturing: Evidence from a Firm-level Survey

Elvis K. Avenyo (), Jason F. Bell () and Julius Nyamwena ()
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Elvis K. Avenyo: Centre for Competition, Regulation and Economic Development (CCRED), University of Johannesburg, South Africa.
Jason F. Bell: Centre for Competition, Regulation and Economic Development (CCRED), University of Johannesburg, South Africa.
Julius Nyamwena: Centre for Competition, Regulation and Economic Development (CCRED) at the University of Johannesburg.

No 2022-13, SARChI-ID Working Papers from SARChI Industrial Development (SARChI-ID), University of Johannesburg (UJ)

Abstract: Digital technologies and digitalisation are emerging as the new drivers of structural transformation in developing countries. At the firm level, the adoption of advanced digital technologies offers prospects for improved productivity and competitiveness, and hence digital industrialisation. However, the determinants of adoption of digital technologies in manufacturing firms in developing countries remain anecdotal. Using unique online survey data on 516 manufacturing firms in South Africa, and a multivariate probit model, this paper examines the determinants of digital technology adoption in South African manufacturing firms. Our results show heterogeneity in the factors that explain the adoption of digital technologies across business functions. Overall, the empirical results reveal that innovation, foreign ownership, exposure to export markets, and higher-skilled human capital push the adoption of digital technologies, while a lack of capital constrains the adoption of digital technologies in our sampled firms. We discuss the possible policy implications of our findings and how they fit into the South African Digital Skills policy discourse.

Keywords: digital technology; technology adoption; manufacturing; South Africa (search for similar items in EconPapers)
Pages: 36 pages
Date: 2022-10, Revised 2022-10
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