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A dynamic panel study on digitalization and firm's agility: What drives agility in advanced economies 2009–2018

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  • Škare, Marinko
  • Soriano, Domingo Riberio

Abstract

Firm agility today is not a factor of competitiveness or success but a survival instrument on the market. Disruptive innovations and technological advancement, together with digitalization, change the role of firm agility. We show that the link between the national/industry level of digitalization and firm agility is statistically robust and essential. We study the link on data from 2009 to 2018 in fifteen EU advanced economies using dynamic panel data modeling. The digitalization impact level differs across firms by ownership type (family to non-family firms). Agility in family firms is strongly influenced by the national/industry level of digitization and investments in intangible assets (particularly the creation of own-organizational capital). Non-family firms' agility depends on investment in human capital, design, and creation of new products and minorly on national/industry digitalization level. Digitalization and gross investments in intangible assets can increase family firm agility exponentially (elasticity coefficient of 85 for-profit margins). Policymakers using policy supporting national/industry digitalization can boost economic growth significantly. Managers and practitioners targeting specific investments in intangible assets can improve and increase firm agility to large extents.

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  • Škare, Marinko & Soriano, Domingo Riberio, 2021. "A dynamic panel study on digitalization and firm's agility: What drives agility in advanced economies 2009–2018," Technological Forecasting and Social Change, Elsevier, vol. 163(C).
    • Handle: RePEc:eee:tefoso:v:163:y:2021:i:c:s0040162520312440
    DOI: 10.1016/j.techfore.2020.120418
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    16. Maran, Thomas K. & Liegl, Simon & Davila, Andrés & Moder, Sebastian & Kraus, Sascha & Mahto, Raj V., 2022. "Who fits into the digital workplace? Mapping digital self-efficacy and agility onto psychological traits," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    17. Jafari-Sadeghi, Vahid & Amoozad Mahdiraji, Hannan & Busso, Donatella & Yahiaoui, Dorra, 2022. "Towards agility in international high-tech SMEs: Exploring key drivers and main outcomes of dynamic capabilities," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
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    More about this item

    Keywords

    Digitalization; Agility; Family firms; Non-family firms; Dynamic panel; Arellano-Bond;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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