Abstract
In this study we examine the influence of digitalization on innovation performance in SMEs. We first conceptualize digital maturity as a possible measure of digitalization in organizations and then propose a one-dimensional digital maturity model: digital sophistication model, to classify the state of digital maturity in SMEs. Subsequently, we use ordered logit estimation techniques to predict the influence of digital maturity on the prospects of innovation in our sample of 820 German SMEs. Our results show a significant positive influence of digital maturity on innovation performance in our sample SMEs. We discuss results and implications of our research study.
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