Regional Digitalization and Food-Service Industry Productivity: Evidence from Russian Regions

Abstract

This study examines how different dimensions of the regional digital environment are associated with productivity in the food-service sector across Russian regions. Using regional panel data, the study distinguishes among digital infrastructure, digital platform adoption, online consumption, and advanced digital technologies to examine whether these associations vary across regions with different levels of sectoral productivity. Digital infrastructure is consistently associated with higher food-service productivity, with stronger associations observed in lower-productivity regions, suggesting that digital connectivity may be particularly relevant to regional disparities in service-sector development. Digital platform adoption also demonstrates generally positive associations with productivity across the productivity distribution, highlighting the growing importance of digitally enabled service delivery and platform-based business models in food services. In contrast, online consumption has limited contemporaneous associations with productivity but shows a stronger positive association in higher-productivity regions, suggesting that the relationship between digital consumer demand and productivity may depend on existing regional capabilities. Advanced digitalization, captured through a PCA-based index of AI, IoT, big data, and cloud technologies, is negatively associated with productivity, potentially reflecting adjustment costs and the complementary organizational and managerial capabilities required for effective adoption.