The impact of the digital economy on economic growth: The case of OECD countries

Abstract

Purpose: This longitudinal study analyzes the impact of the digital econo- my on economic growth in Organisation for Economic Co-operation and Development (OECD)’s countries, divided into groups by their level of development (transition and innovation countries). Originality/value: Empirical studies on information and communica- tions technology (ICT)’s impact on countries’ economic growth have increased over the last few years. However, there are still no studies that analyze this problem for the group of OECD countries, let alone divide these countries according to their level of economic development to assess the differences between more developed countries and less developed. The study of this gap in the literature allows us to infer important impli- cations for policymakers to implement the digital agenda more efficiently. Design/methodology/approach: We used a panel data sample from the World Bank covering 36 OECD countries from 2000 to 2019. A statisti- cal analysis of the variables was carried out separately for all OECD countries and the transition and innovation countries groups. We then performed a correlation analysis between the variables, and three models were estimated using the generalized moments panel method (GMM) using a fixed cross-section. Findings: The impact of the digital economy as measured by the tech- nology proxy – internet, mobile phone, and fixed-broadband – on the economic growth of OECD countries depends on their level of develop- ment and the measures of the technologies that capture the digital econo- my. ICTs positively influence the development of the economies of OECD countries and can be used as instruments by policymakers. These agents must implement policies that strengthen the physical and technological infrastructures of the ICTs, the digital empowerment of human capital, and more significant social equity in accessing the ICTs.