Digitalization and Productivity: In Search of the Holy Grail — Firm-level Empirical Evidence from European Countries

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Abstract

Using ORBIS firm-level data matched with Eurostat digital adoption data (broadband, ERP, CRM, cloud computing, 2009-2015) for 20 EU countries, this article finds robust evidence that digital technology adoption is associated with productivity gains, especially in manufacturing and routine-intensive activities. Frontier firms benefit more from digitalization than laggards. Compared to earlier technology waves, digital adoption appears more dependent on complementary intangible assets (skills, organizational capital), slowing diffusion among less productive firms and contributing to increased productivity dispersion and slower aggregate growth.

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