The Impact of Internet Banking on the Performance of Micro and Small Enterprises in Costa Rica: A Randomized Controlled Experiment
Date issued
Sep 2011
Subject
E-Business;
Small Business;
Science and Technology
JEL code
D22 - Firm Behavior: Empirical Analysis;
D83 - Search • Learning • Information and Knowledge • Communication • Belief • Unawareness;
O14 - Industrialization • Manufacturing and Service Industries • Choice of Technology;
O38 - Government Policy
Country
Costa Rica
Category
Working Papers
This paper uses a randomized controlled experiment in Costa Rica to determine whether IB use by Banco Nacional de Desarrollo's micro and small enterprise (MSE) clients has an impact on their performance, measured in terms of productivity, increase in sales, and cost reduction. Results from the intervention group surveys indicate that Internet use is limited in MSEs' daily operations because of limited access to computers and the relatively low penetration of Internet services in employees' activities. In addition, firms have limited knowledge about the uses of the Internet as a business development tool. These results contrast with the reported benefits obtained by a small group of firms. Those benefits include reduced costs, higher sales, and better contact with customers.