The (Un)Hidden Effects of Digitalization on Enterprise Performance During Covid-19 Pandemic

This paper focuses on the analysis of digitalization of enterprises and its performance impact in Albania. Using the World Bank Enterprise Survey of 2019 merged with the ES follow-up on Covid-19 for Albania, we investigate the overall performance of enterprises during Covid-19 pandemic and the role of digitalization. The objective of the survey is to better understand the firm’s experience in the private sector. The collected data are based on firms’ experiences and perception of the environment in which they operate. The paper uses these specific questions to study digitalization prior to and during Covid-19 pandemic. ES questionnaires focus on the following questions: (a) Does the establishment have its own website? (b) Started or increased business activity online? (c) Started or increased remote work arrangement for its workforce? The dependent variable is performance of the enterprises measured in terms of sales growth, employment growth, closure, and production adjustment. While the vector of independent variables is composed by enterprise characteristics such as firm size, ownership structure, legal status, region, etc. Moreover, dummy variables are used to capture access to formal banking service, and gender ownership. JEL Classification: L25, L26, L86,