Digitalization, firm performance and internationalization of microfirms in India

Employing rich survey data on 836 Indian microfirms, we examine the nexus between digital adoption, firm performance and internationalization. Using 12 unique parameters that capture the multidimensional nature of digitalization, we find that the Internet plays a significant role in improving firm sales, performance and export participation. Furthermore, we find that the use of social media has a significant association with increases in firm sales and output per worker. Furthermore, the use of digital technologies for purchasing and tracking inputs and for paying suppliers is positively associated with a greater propensity for Indian microfirms to export.