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Small Enterprises' Digital Competencies and Financial Performance

Author

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  • Drydakis, Nick

    (Anglia Ruskin University)

Abstract

In the contemporary business landscape, digital competencies have become a crucial factor for small enterprises to remain competitive and thrive. The present study examines how a business applications training, aiming to boost small enterprises' digital competencies, affects their financial performance. The business applications training took place in Greece, Cyprus, and the United Kingdom. Longitudinal data were collected between 2021 and 2023. The study revealed a positive association between digital competencies and the revenue growth rate of enterprises. Moreover, it was observed that following business applications training, the impact of digital competencies on the revenue growth rate strengthened compared to before the training. This pattern persisted across all three regions, underscoring the robustness of the estimated outcome. The study indicates that training that boosts enterprises' digital competencies could facilitate their ability to adapt to changing market conditions and stay competitive, contributing to increased financial performance. Small enterprises that develop and leverage digital competencies could be better positioned to seize growth opportunities, enhance efficiency, and adapt to the evolving business landscape.

Suggested Citation

  • Drydakis, Nick, 2024. "Small Enterprises' Digital Competencies and Financial Performance," IZA Discussion Papers 17516, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17516
    as

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    File URL: https://docs.iza.org/dp17516.pdf
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    References listed on IDEAS

    as
    1. Nick Drydakis, 2022. "Artificial Intelligence and Reduced SMEs’ Business Risks. A Dynamic Capabilities Analysis During the COVID-19 Pandemic," Information Systems Frontiers, Springer, vol. 24(4), pages 1223-1247, August.
    2. Krol, Robert, 2021. "The Effects of Immigration on Entrepreneurship and Innovation," Working Papers 11209, George Mason University, Mercatus Center.
    3. Nick Drydakis, 2022. "Improving Entrepreneurs’ Digital Skills and Firms’ Digital Competencies through Business Apps Training: A Study of Small Firms," Sustainability, MDPI, vol. 14(8), pages 1-23, April.
    4. Nick Drydakis, 2024. "Artificial intelligence capital and employment prospects," Oxford Economic Papers, Oxford University Press, vol. 76(4), pages 901-919.
    5. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    6. Panos Hatziprokopiou & Yannis Frangopoulos, 2016. "Migrant economies and everyday spaces in Athens in times of crisis," City, Taylor & Francis Journals, vol. 20(1), pages 61-74, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    revenue growth; digital competencies; small enterprises; business applications; financial performance; immigrant entrepreneurship;
    All these keywords.

    JEL classification:

    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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