Firms' digital investment and resilience to shocks: Evidence from the COVID‐19 pandemic in Ghana

Abstract

This paper examines the effect of digital investment on firm performance amid the COVID‐19 pandemic in Ghana. Applying a difference‐in‐difference estimator to a panel of 7548 firm‐year observations from 2019 to 2020, we find a positive relationship between digital investment and firm performance. While these findings are robust to different estimation techniques, the complementarity of mobile money platforms and internet services yields a significant impact on firm performance than using either exclusively. We identify hiring new workers, downsizing and working from home as potential channels through which digital investment could influence firms' resilience amid the pandemic.