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Internationalization, Diversification, Information Technology and Productivity in SMEs: A Non Parametric Analysis

Posted: 24 Oct 2009  

Jose Fernandez-Mendez

affiliation not provided to SSRN

Antonio Rodriguez-Duarte

affiliation not provided to SSRN

Jose I. Lopez-Sanchez

affiliation not provided to SSRN

Francesco Domenico Sandulli

UCM-Orange Chair, Complutense University of Madrid

Date Written: October 24, 2009

Abstract

Previous literature has suggested that the adoption of Information Technology (IT) can affect the efficiency of multimarket firms. This paper examines the empirical relationship between IT and the efficiency of small and medium enterprises either following diversification strategies or selling their products in foreign markets. We formulate an empirical model to relate the use of information technology in different functional areas of the SMEs to their productivity. This model is tested using a large sample of more than 2,000 Spanish SMEs. Overall, intensive use of IT in operations processes is found to be associated with substantial increases in productivity of firms following both related and unrelated diversification. In addition, export firms with more intensive use of IT in most functional areas have a higher productivity, especially in the case of firms with high levels of computerization of financial processes. These results are consistent with previous theoretical arguments that productivity is increased by IT usage and open future research directions related to the role played by IT on the management control systems of both diversified and export firms.

Keywords: Productivity, Data Envelopment Analysis (DEA), Diversification, Transaction Costs, Internationalization, Spain

JEL Classification: M15, M16, L25, C14

Suggested Citation

Fernandez-Mendez, Jose and Rodriguez-Duarte, Antonio and Lopez-Sanchez, Jose I. and Sandulli, Francesco Domenico, Internationalization, Diversification, Information Technology and Productivity in SMEs: A Non Parametric Analysis (October 24, 2009). Available at SSRN: https://ssrn.com/abstract=1493622

Jose Fernandez-Mendez

affiliation not provided to SSRN ( email )

Antonio Rodriguez-Duarte

affiliation not provided to SSRN ( email )

Jose I. Lopez-Sanchez

affiliation not provided to SSRN ( email )

Francesco Domenico Sandulli (Contact Author)

UCM-Orange Chair, Complutense University of Madrid ( email )

Carretera de Humera s/n
Madrid, Madrid 28223
Spain

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