Analysis of the impact of digital development on a country’s economic growth

Abstract

Examining the impact of digital technologies on advanced economies is crucial. The COVID-19 pandemic underscores their role in economic stability, emphasising the need to assess digitization’s relationship with economic growth using regression models, which was the aim of this study. Analytical and inductive methods were utilised to determine the basic set of digitalization indicators. Through expert evaluation, a basis of five key indicators was formed: internet coverage level, level of financial activity online, level of digital skills development among the population, degree of integration of digital technologies into government processes, and volume of online purchases. To isolate the most influential factors, an experimental approach involving the construction of a linear regression model and the partial use of data augmentation statistical methods based on autoregression was employed. The results indicate that the most significant factor is the level of financial activity online. However, negative effects are observed in certain aspects of digitalization, such as online purchases, which require further analysis. The inclusion of state factors in the model proved to be crucial for accurately assessing the impact of digitalization on the economy. This underscores the need for further research in this area to gain a deeper understanding of the mechanisms by which digital technologies influence economic development and to develop development strategies. The overall results confirm theoretical concepts regarding the positive correlation between digitalization and economic development but also indicate the need for refinement and additional research into the specific mechanisms of this impact. This opens the way for further detailed evaluation of potential sub-indicators of this metric and a comprehensive understanding of the relationship between digitalization and the economy. In the public sector, these data can serve as a practical basis for policy adjustments related to the implementation of new technologies aimed at improving the economic situation.