The relationship between digitalization and profitability A cross-sectional study of firms in the Norwegian shipping industry

Abstract

In this paper, we study the relationship between profitability and the level of digitalization of firms in the Norwegian shipping industry. We found the digitalization level by using a Likert scale on a survey sent to companies within this industry. Our main goal with this study was to investigate whether there is a correlation between profitability and the level of digitalization, and to identify whether this correlation is positive or negative. The subject was chosen based on the lacking research within this field. In addition to using cross-sectional data on digitalization, we collected data on years since the digitalization started, ROA as a measurement of profitability, the age and the size of the company, all calculated from 2019. We retrieved 39 usable responses to our survey, which were used as the sample size. The results of our regression models were inconclusive, meaning that we could not conclude with the null hypothesis or the alternative hypothesis. Because digitalization will only affect the operating part of companies, other drivers affected by the market will not be influenced. We believe our results are a consequence of not straining out the unaffected drivers, and not because digitalization has no impact on the profitability of firms in the Norwegian shipping industry.