Abstract
Kenyan firms rely on technology to overcome obstacles associated with excessive regulations, poor infrastructure and widespread corruption. This study shows that reliance on technologies such as email, website and the internet for communication purposes has significant positive impacts on productivity for firms with one or more female owners. Using a representative sample of industries, the exogenous component of technology use is isolated by using information on the presence of schools from colonial Kenya as well as a geographical indicator measuring rainfall shocks. These instruments pass a series of checks on strength and relevance, and satisfy the exclusion restriction. Results indicate that for firms with female owners, a 10 percent increase in technology use results in a 1.69 percentage point increase in value-added per worker. For male-owned firms, a positive effect is evident but significantly more muted.
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