The Performance of Indonesian Businesses during COVID-19 Pandemic: Do Technological Dependence and Tax Incentives Matter?

No previous study in emerging economies has investigated the impact of technological dependence on business performance during the COVID-19 pandemic. Moreover, no detailed analysis has been conducted to study the link between the utilisation of tax incentives and business performance during these unprecedented times. Based on nationwide survey data comprising 12,361 Indonesian businesses, this study examines the association between technological dependence, tax incentives, and business performance. This paper reveals strong empirical evidence indicating information technology and tax incentives have facilitated Indonesian businesses to be more resilient during the pandemic. While demonstrating the role of tax incentives in supporting business resiliency, the finding implies that the Indonesian government needs to accelerate the expansion of digital infrastructure across the nation and encourage nontechnology-based businesses to reap the benefit of adopting information technology. These results can be used to compare with those from other emerging economies or developed countries.