PROPENSITY SCORE MATCHING INSIGHTS: HOW ICT ADOPTION FUELS SME PROFITABILITY?

DOI: https://doie.org/10.10399/APER.2025743080

Authors:

Dr. Saurabh Singh, Dr. Vijay Kumar

Keywords:

SMEs, Profitability, ICT, Propensity Score Matching (PSM), Economic growth Technology adoption

Abstract:

ABSTRACT Small and Medium Enterprises (SMEs) play an imperative role in driving the economic growth and promoting innovation, substantially contributing to generation of employment. SMEs profitability is affected by different factors such as size and age of the firm, industry, and the management practices. With these factors, the adoption of Information and communication technologies (ICT) has surfaced as a crucial driver for SMEs enabling them to reduce costs, increase efficiency, and expand their market reach. This study analyses the effect of adoption of ICT on SMEs profitability by applying the Propensity Score Matching (PSM) methodology. As per our findings, a positive correlation is found between ICT adoption and increased profitability in SMEs. However, this effect is context dependent which varies with the types of ICT tools and the process implemented, traits of industry and the geographic location.

PDF