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Digital technology adoption and SMEs’ Financial Performance: Evidence from Thailand

Author

Listed:
  • Juthathip Jongwanich
  • Archanun Kohpaiboon

    (Faculty of Economics, Thammasat University)

Abstract

This paper aims to examine the impacts of digital technology (DT) adoption, with an emphasis on the role of ICT, on SMEs’ financial performance using Thailand as a case study during 2018-2021. The importance of DT depth and personnels graduated in a field of ICT was also investigated in this study. Our results show that types of ICT adoption, size of firms and sectors mattered in analyzing impacts of DT on firms’ financial performance. SMEs received significant benefits when ICT adoption was considered in terms of purchasing goods and services via the Internet; sales online (e-Commerce) as well as online payments. Due to the nature of industry, the service sector tended to gain more benefits from operating through online activities than the manufacturing sector. In terms of software usage, it generated benefits mostly for the medium and large firms, but less crucial for the small ones. Interestingly, access to the internet, with other purposes than the e-commerce, showed limited impacts in influencing firms’ financial performance, even in the large firms. Regarding the technology depth, in general, the results revealed that it generates more positive impacts on income than profits, reflecting high costs of obtaining advanced technology or diversifying DT usage. Limited impacts of ICT personnels graduated and its depth on SMEs’ performance generated concerns on shortages of basic and advanced ICT skills and costs of hiring ICT staffs for SMEs.

Suggested Citation

  • Juthathip Jongwanich & Archanun Kohpaiboon, 2024. "Digital technology adoption and SMEs’ Financial Performance: Evidence from Thailand," Discussion Papers 81, Thammasat University, Faculty of Economics, revised Jan 2024.
    • Handle: RePEc:tha:wpaper:20240104
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Digital Technologies; SMEs; and Developing Countries;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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