Digitalization, innovation, and firm performance: does gender matter?

This study investigates how gender moderates the relationship between digitalization, innovation, and firm productivity in Egypt, Jordan, and Morocco using the ERF Combined Survey of Enterprises’ Digitization—the only harmonized, cross-country microdata on digital adoption in MENA—supplemented by the World Bank Enterprise Survey panel (2013–2020). The ERF survey captures granular digital metrics including website ownership, digital platform participation, online sales engagement, and internet utilization. Generalized structural equation models account for selection into digital adoption and innovation. Results show that women-led firms demonstrate a greater likelihood of adopting digital technologies compared to men-led firms, reflecting strong positive selection into firm leadership. Among firms that pursue digital adoption, the association with innovation is at least as strong for women-led firms as for men-led firms. Innovation improves firm performance, and returns to innovation for women-led firms are comparable to those for men-led firms. Policy implications suggest focusing on broadening entry into entrepreneurship itself rather than assuming targeted post-entry support is needed, given the exceptional capabilities demonstrated by women once they become entrepreneurs.