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Digital divides among microsized firms: Evidence from Sub-Saharan Africa

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  • Damien GIROLLET

Abstract

This paper explores digital inequalities in access and usage among 3,300 firms and entrepreneurs from eight sub-Saharan African countries. To account for informal firms’ heterogeneity, we identify three segments: an upper tier of top performers, a lower tier of survivalists, and an intermediate segment composed of constrained gazelles. Although digital technologies are already used by most of the informal entrepreneurs in Sub-Saharan Africa, our findings suggest that the diffusion of these new technologies is uneven across informal firms, digital inequalities being rooted in the already existing socioeconomic inequalities. Indeed, digital inequalities align with the hierarchy of informal sectors in each country and are associated with entrepreneurs’ and firms’ characteristics. Using multivariate analysis, we find that gender and rural/urban digital divides persist in the productive sphere. At the same time, firms with a high level of informality, low profits, precarious operating conditions, and no access to financial services are less likely to use digital technologies.

Suggested Citation

  • Damien GIROLLET, 2023. "Digital divides among microsized firms: Evidence from Sub-Saharan Africa," Bordeaux Economics Working Papers 2023-03, Bordeaux School of Economics (BSE).
  • Handle: RePEc:grt:bdxewp:2023-03
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    File URL: http://bordeauxeconomicswp.u-bordeaux.fr/2023/2023-03.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Digital technology; ICT; digital divide; informality; Africa.;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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