ICT Adoption and The Business Environment for Enterprise Performance: A Cross-Country Typology

Abstract

This research provides a data-driven country typology, which is based on empirically derived clusters of ICT adoption, business environment and firm performance, instead of on predefined income or regional categories. The data at country level were gathered for 178 countries, based on 15 indicators across three areas: digital infrastructure, business environment, and firm performance. Digital infrastructure and credit-access indicators were sourced from World Bank World Development Indicators. The indicators were reduced to four component scores by domain-specific principal component analysis and clustered by k-means and ward hierarchical clustering. Stability of the clusters was evaluated by bootstrap consensus clustering, and was tested with the Adjusted Rand Index, PERMANOVA, Kruskal-Wallis tests and sensitivity analyses. Three empirically derived clusters were identified. Cluster 1 showed less favorable digital-infrastructure indicators and firm-level innovation indicators, alongside higher financial-constraint and infrastructure-reliability burdens. Cluster 2 combined more favorable digital-infrastructure and finance-access indicators with comparatively low firm-level innovation indicators. Cluster 3 showed favorable values across nearly all indicators. The findings indicated that stronger digital infrastructure indicators were not always correlated with stronger firm-innovation indicators, suggesting enterprise-development strategies may benefit from taking a holistic view of technological, business-environment, and organizational conditions, with longitudinal data needed to establish developmental trajectories.