The role of digital literacy in corporate digital communication and SMEs’ performance

Online communication devices should be used effectively to ensure that small and medium enterprises (SMEs) are able to optimize their operations, create relationship with customers and attain sustainable growth. This paper discusses how corporate digital communication (CDC) influences the performance of SMEs based on technological adoption, the presence of social media, and customer engagement as the determinants of SME performance. The sample population in this study included 73,081 SMEs registered with the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN). The hypotheses were tested and the measurement and structural models were evaluated using Structural Equation Modelling- Analysis of Moment Structures (SEMAMOS). The results indicate that there are strong positive correlations among technological adoption, presence of social media, customer engagement and SME performance. The research also established the fact that digital literacy mediates such associations where low digital literacy undermines the effects of corporate digital communication on SME performance. The research offers a solid empirical data, which supports the assumption that the implementation of digital tools in the absence of investing in digital literacy can prevent the potential benefits on SMEs. Therefore, policymakers and business development agencies are advised to focus more on digital upskilling programs, so that SMEs can be better placed to operate within the digital economy.