This dissertation explores the relationship between digital technologies and firm performance. It draws on recent research in the fields of innovation and digitalisation and studies the relationship between software development and firms' capabilities to innovate, internationalise, and develop growth aspirations. The main aim is to go beyond the indicators of digital technology use and instead study the development of software and the intentions behind developing it. The thesis studies the link between software development and firm characteristics. The dissertation consists of four distinct yet interrelated papers, each addressing the different aspects of this relationship. 

Paper I provides an insight into the role of software in digital transformation, comparing it to Research and Development (R&D) investments and highlighting software development as a critical component of innovation that contributes to firms’ competitive advantage in the economy. Paper II finds evidence in favour of a ‘software-biased’ shift in innovation and empirically shows the link between software development and the propensity to introduce innovations and have higher innovation sales. Paper III studies the link between growth aspirations and software development, showing that software development is essential for developing growth aspirations and aspiring for international growth. The final paper examines the determinants of internationalisation, revealing a positive relationship between software development and firms' propensity to engage in export and import activities. This finding suggests a complementarity of software development when navigating the complexities of global markets. 

The dissertation contributes to the understanding of software development’s role across firms. It highlights the strategic value of software not just as an operational tool but as an input for building competitive advantage and prospects for innovation, internationalisation, and growth aspirations.