Cross-country differences in European firms’ digitalisation: the role of national culture

Purpose This study investigates the relationship between national culture and the country level of firms' digitalisation, by applying Hofstede's cultural framework to the European Union member states. Although many studies have observed the impact of national culture on firms' innovation and information and communication technology (ICT) adoption, there have been no analyses of how cultural dimensions impact firms' digitalisation at the country level. This study intends to fill that gap. Design/methodology/approach Using a pooled ordinary least square (OLS) model, this study analyses data from 27 European countries over the period from 2014 to 2018. Findings The results suggest the existence of a negative, significant, relationship between both masculinity and uncertainty avoidance, and the country level of firms' digitalisation. Indulgence is found to positively and significantly influence a country's level of digitalisation. Contrary to expectations, this study indicates a negative, significant, relationship between individualism and the degree of digitalisation. Power distance is found to have no significant impact. Originality/value This study contributes to the literature by showing how a country's various cultural dimensions help or hinder the level of firms' digitalisation in that country. Theoretical and managerial implications are presented, including suggestions for future research.