Digital leapfrogging, the transformative power of e-business on formal and informal companies, and impact on employment

The ubiquitous presence of digital transformation has radically transformed various sectors, including the economy. However, measuring their actual impact on enterprise competitiveness and performance remains challenging. E-business has emerged as a game changer, providing businesses with greater internal flexibility and improved communication among employees. While e-commerce holds immense potential in developing countries, where Internet access is on the rise, its adoption is still limited. This study examines the impact of e-business on company performance by considering both formal and informal sectors. Using theoretical modeling and advanced methods, such as endogenous switching regression, instrumental variable regression, and the 2018 General Business Census for Togo, this research contributes to the economic literature by exploring e-business in-depth and providing a comparative analysis between the formal and informal sectors and employment in additional investigations. The results show that e-business positively affects a company’s performance, with informal sector firms experience greater benefits, regardless of whether they negatively affect employment. This study highlights the need for further support for e-business adoption and offers insights for policymakers and business leaders to improve company performance and employment.