COVID-19 and productivity-enhancing digitalisation: Firm-level evidence from Slovenia
This paper provides evidence on the impact of digitalisation on productivity in Slovenia
during the COVID-19 crisis. The pandemic affected overall labour productivity negatively.
Nonetheless, results show that firms that were more ICT-intensive before the pandemic
experienced a smaller decline in their labour productivity growth compared to their
less ICT-intensive peers in the same 2-digit level sector. This resilience effect
was strongest for firms that are integrated in global value chains. A second finding
is that COVID-19 resulted in productivity-enhancing reallocation of labour to ICT-intensive
firms, reflecting that these firms registered higher employment growth relative to
their less ICT-intensive peers during the pandemic. A third finding is that high levels
of state ownership in a sector was associated with less productivity-enhancing reallocation.
This suggests that state-owned enterprises retained workers that could be redirected
to more productive firms. Together, these findings highlight the potential of digitalisation
to support resilience and stronger productivity growth, although labour market rigidities
and state ownership hamper the positive impact of digitalisation.
Published on July 10, 2023
In series:OECD Economics Department Working Papersview more titles