Scaling up to the cloud: Cloud technology use and growth rates in small and large firms

Abstract

Recent empirical evidence shows that investments in ICT disproportionately improve the performance of larger firms versus smaller ones. However, ICT may not be all alike, as they differ in their impact on firms' organisational structure. We investigate the effect of the use of cloud services on the long run size growth rate of French firms. We find that cloud services positively impact firms' growth rates, with smaller firms experiencing more significant benefits compared to larger firms. Our findings suggest cloud technologies help reduce barriers to digitalisation, which affect especially smaller firms. By lowering these barriers, cloud adoption enhances scalability and unlocks untapped growth potential.