Digital finance as a complementary capability system: evidence from firms in Ghana

This study examines whether and under what conditions digital finance is associated with the firm's productivity in developing economies. This study develops a capability-contingent explanation of digital finance by integrating the resource-based view with complementarity theory, arguing that the returns to digital finance depend on both internal organizational capabilities. Using nationally representative data from the 2024 Ghana Integrated Business Establishment Survey I, covering over 180,000 firms, the study uses log-linear productivity models with robust standard errors, adjusting for firm characteristics, sectoral disparities, and geographic heterogeneity. The results show that digital finance adoption is associated with significantly higher productivity, with adopting firms exhibiting ∼49.5% higher labor productivity. Complementarity effects are demonstrated by interaction estimates, which show that the marginal effect of digital finance is notably stronger among formally registered firms and substantially larger for firms with digital record-keeping systems. The findings demonstrate that digital finance does not operate as a standalone but as part of a broader system of interdependent capabilities, explaining the mixed evidence in prior research and shifting the focus from access to effectiveness. By demonstrating that returns to digital finance are capability-contingent, the study adds to literature and emphasizes the significance of institutional integration and internal readiness.