Mobility restrictions and firms' decisions to adopt digital technologies during the COVID-19 pandemic: across industry sectors study

Abstract

Purpose: Despite the importance of digital technology in mitigating the adverse effects of the COVID-19 pandemic and related containment measures, limited research attention has been devoted to the impact of movement restrictions on digital business transformation in North Africa. This paper investigates the impact of mobility restrictions on firms' decisions to adopt digital technologies across sectors, emphasizing the challenges associated with accessing both customers and suppliers. Design/methodology/approach: The study uses the ERF COVID-19 MENA Monitor Enterprise survey (2021), covering 3,978 enterprises across three North African countries: Egypt, Tunisia and Morocco. The analysis employed the linear probability model (LPM) to account for observable and unobservable heterogeneity across countries and over time. Findings: The results indicated that mobility restrictions have a positive impact on firms' decisions to adopt digital solutions during the COVID-19 pandemic across most industry sectors. Notably, firms operating in manufacturing, trade, retail and services demonstrated a higher likelihood to adopt technologies. However, the analysis revealed some variations in the impact of mobility restrictions across sectors and countries. Originality/value: This study has several contributions. First, this study is unique in utilizing firm-level data gathered during the COVID-19 pandemic to investigate the impact of mobility restrictions on firms' decisions to adopt digital solutions. Second, the study examines the influence of mobility restrictions on digitalization across industry sectors, to the best of our knowledge, no empirical study has specifically focused on the digital business transformation across sectors.