Adaption of Digital Technologies: the Case of Latvian Firms

This study examines the adoption of digital technologies by Latvian firms, focusing on the factors influencing adoption decisions and the impact of these technologies on firm performance. Using firm-level responses to the digitalisation survey, the paper covers four technologies: broadband internet, webpages, web sales, and EDI sales. The results suggest that larger firms, exporters, and those employing ICT specialists along with a higher-skilled workforce, are more inlined to adopt digital technologies. The provision of relevant training programmes for both ICT and non-ICT staff is essential for fos- tering technology adoption, particularly for more complex systems like web sales. To assess the impact of digitalisation on firm performance, the study employs a difference- in-differences approach, finding that webpage adoption positively affects turnover and employment, particularly in the manufacturing sector. EDI sales also enhance firm performance, boosting turnover and employment. The study emphasises the need for complementary investments in workforce skills, ICT training, and organisational re- structuring to fully realise the benefits of digital transformation.

JEL codes: D22, O14, O33, L25, J23, J24, F14
Keywords: Digital technologies, e-commerce, firm performance