productivity and factor demand. The authors add that the median productivity effects of email and website are potentially larger than those from exporting and augmenting managerial skills.

Verhoogen (2020) summarizes recent empirical literature that discusses the determinants of upgrading (such as innovation, technology adoption, and increases in productivity) in developing countries, focusing primarily on studies of large manufacturing firms. The author argues that one of the channels of upgrading is selling to consumers from developed countries, and that ICT adoption is linked to the internationalization of firms, especially, to exporting activities. For instance, Tseng and Johnsen (2011) find a positive relationship between usage of the internet and a firm’s internationalization process in the UK manufacturing small and medium enterprises (SMEs), while Hagsten and Kotnik (2017) show similar results for a set of European SMEs. Similarly, Atiyas and Dutz (2021) study the case of informal micro-sized firms in Senegal and find that the use of a smartphone is positively correlated with exporting activities. Jagun et al. (2008) add that mobile phones have reduced information failures and costs for Nigerian micro-enterprises. However, the authors note that there is conflicting evidence regarding the effect of these technologies on reducing income inequality among firms. They argue that the businesses with the most resources were early adopters of these technologies and benefited from mobile orders, while the least resourceful businesses may be losing orders due to either late adoption or a learning curve.

The literature also relates ICT productivity effects to firm ownership, size, and digitization level. Chew et al. (2010) use regression analysis and a sample of female entrepreneurs from Mumbai to show that business growth in female-owned micro-enterprises is positively affected by ICT access. Tseng and Johnsen (2011) claim that internet adoption is more important in the internationalization process of high-tech firms rather than low-tech firms (classified based on the share of expenses devoted to R&D). To this, Gal et al. (2019) add that productivity gains from ICT in the EU do not depend on firm size but rather on productivity level and type of technology. They find that gains are higher in high productivity firms, increasing the productivity gap between frontier and laggard firms. For instance, the authors find that, on average, a 10 percentage-point increase in adoption of cloud computing services increases a firm’s productivity level by 3.5 percent, but that these productivity gains are more than doubled for high productivity firms. This difference could be explained by the dependence on ICT specialists which is higher in less productive firms (Berlingieri et al., 2018). In terms of type of technology, Gal et al. (2019) find that cloud computing has bigger productivity effects on smaller firms, while Enterprise Resource Planning (a type of IT applications, designed to automate business processes) is more beneficial for bigger firms.

In general, the literature points to multiple channels of impact on productivity, and when considering ICT as a determinant, there is a consensus that their impact is amplified when accompanied by other factors such as employees' skills. Colombo et al. (2013) study how the adoption of broadband internet has affected the productivity of 799 Italian SMEs using data from 1998 to 2004. The authors find that the impact of internet adoption on productivity is negligible, but that broadband application fosters productivity if combined with complementary strategic and organizational changes such as adjustment of internal routines to maximize the potential of ICT, cultural adaptation to the use of technologies, and good organizational skills.

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