Entrepreneurs’ impatience and digital technologies

This paper analyzes the impact of entrepreneurs' preferences (impatience and risk attitudes) on firms' propensity to invest in both general and digital technologies. Using data from the Rilevazione su Imprese e Lavoro (RIL) survey, conducted on a representative sample of Italian firms, we find that impatience significantly reduces the likelihood of adopting digital investments, even when controlling for risk preferences. To address potential endogeneity and simultaneity concerns, we implement an instrumental variable (IV) strategy, exploiting exogenous variation from exposure to earthquakes. The findings remain robust and highlight the crucial role of impatience in shaping investment decisions, particularly in digital technologies.Is impatience holding back digital innovation in Italian firms? This study investigates how entrepreneurs' impatience and risk attitudes affect their investment in digital technologies. Using data from a survey of Italian firms and an innovative approach that leverages earthquakes as a natural experiment, we discovered that impatience significantly reduces the likelihood of investing in digital technologies, even when accounting for risk preferences. This suggests that entrepreneurs' tendency towards impatience can be a major barrier to adopting essential digital innovations. The findings underscore the importance of developing policies that promote long-term investment strategies and help entrepreneurs build patience. Such policies could facilitate greater adoption of digital technologies and boost business competitiveness.