2024/25 LEM Working Paper Series

Cloud technologies, firm growth and industry concentration: Evidence from France

Bernardo Caldarola and Luca Fontanelli
  Keywords
 
cloud, ICT, concentration, firm growth rate, firm performance
  JEL Classifications
 
L20, L25, O33
  Abstract
 
Recent empirical evidence finds positive associations between digitalisation and industry concentration. However, ICT may not be all alike. We investigate the effect of the purchase of cloud services on the long run size growth rate of French firms. Our findings suggest that cloud services positively impact firm growth rates, with smaller firms experiencing more significant benefits compared to larger firms. This evidence suggests that the diffusion of cloud technologies may help mitigate concentration in the era of the digital transition by favouring the digitalisation and growth of smaller firms, especially when the cloud services provided are more advanced.
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