Nexus between Digitalization and Economic Growth: Evidence from Developing Countries

Abstract

Information, communication, and technology have played a tremendous role in fostering the economic growth of developing economies. To highlight the significant role of digitalization on growth, this research has focused on the contributing role of education, financial development, and urban population. We have used data from the time span of 2002 to 2020 of 12 developing economies to check the relationship between dependent and independent variables. GDP per capita was taken as the dependent variable. Independent variables were digitalization, education, financial development, and urban population. By using the random effect technique, it was found that digitalization has boosted the economic growth of developing countries. Moreover, education, financial development, and urban population also enhanced the economic growth of developing economies. The study suggested more education and usage of information and communication technology in these selected countries. Finally, more employment opportunities should be provided in urban areas to absorb more population in production processes for achieving high economic growth.