The Impact of Digital Technology on the Performance of Micro, Small, and Medium Enterprises in Champasack Province

Sovat KHAMPHOUVAN; Chansouk DALASY; Vatsana PHENGPHACHANH; Xaiyasith SENGSULY; Thipphaphone PHONESAVANH

doi:10.36948/ijfmr.2025.v07i05.56600

The Impact of Digital Technology on the Performance of Micro, Small, and Medium Enterprises in Champasack Province

Author(s)	Mr. Sovat KHAMPHOUVAN, Mr. Chansouk DALASY, Ms. Vatsana PHENGPHACHANH, Mr. Xaiyasith SENGSULY, Ms. Thipphaphone PHONESAVANH
Country	Laos
Abstract	This study investigates the impact of digital technology adoption on the performance of Micro, Small, and Medium Enterprises (MSMEs) in Champasack Province, Lao PDR. Using survey data from 397 enterprises and applying an Ordinary Least Squares (OLS) regression model, the analysis examines how digital practices, firm characteristics, and institutional factors influence revenue performance. The results demonstrate that digital technology adoption, including the use of electronic banking applications, online sales combined with wholesale operations, direct delivery services, and payment card readers, has a positive and statistically significant effect on MSME revenues. Among these, electronic banking showed the strongest association, contributing to substantial revenue increases by improving financial efficiency, customer trust, and market accessibility. Additionally, firms with larger asset bases, more employees, formal registration, and better access to finance consistently reported higher revenues. Entrepreneurial factors, such as prior training and exposure to advice on productivity and innovation, were also found to strengthen firm performance. Conversely, enterprises operating solely as individual firms without formal registration were at a revenue disadvantage compared to those structured as single-member limited companies or partnerships. These findings highlight that digital adoption is not an isolated determinant of performance but interacts closely with firm resources, entrepreneurial capacity, and institutional support. For MSMEs in Champasack Province, digitalization provides a pathway to overcome traditional barriers of financing, market reach, and operational inefficiency. The study contributes to the growing body of literature on digital transformation in emerging economies and offers practical insights for policymakers to promote digital finance, business formalization, and capacity building in order to strengthen MSME competitiveness and sustainability in Laos.
Keywords	Digital Technology, MSMEs, Performance, Revenue
Field	Business Administration
Published In	Volume 7, Issue 5, September-October 2025
Published On	2025-09-26
DOI	https://doi.org/10.36948/ijfmr.2025.v07i05.56600

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The Impact of Digital Technology on the Performance of Micro, Small, and Medium Enterprises in Champasack Province

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