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Determinants of digitalization: Evidence from Asia and the Pacific countries

Author

Listed:
  • Md Aslam Mia
  • Md Imran Hossain
  • Sunil Sangwan

Abstract

Purpose - Digitalization is one of the major factors that fosters economic growth across the world. However, the level of digitalization varies significantly between developed and developing countries, with the latter often lagging behind. To bridge this gap, it is crucial to pinpoint the drivers of digitalization, specifically from the macroeconomic and country-level governance dimensions. Therefore, this study aims to investigate the determinants of digitalization, particularly for countries in Asia and the Pacific region. Design/methodology/approach - Our study utilizes unbalanced panel data from 46 Asian and Pacific countries for the period of 2001–2021. Initially, we analyzed the data using conventional econometric methods, such as pooled ordinary least squares (POLS), random-effects model (REM) and fixed-effects model (FEM). Moreover, we employed endogeneity-corrected techniques and alternative proxies to enhance the robustness and reliability of our findings. Findings - Our findings reveal that economic development progress, government expenditure relative to country size and political stability are key drivers of digitalization. In contrast, corruption at the country level emerges as a significant impediment. Notably, our results remain robust to endogeneity-corrected techniques and alternative proxies of digitalization. Overall, these insights can inform policymakers, helping them to understand the macroeconomic and governance factors shaping digitalization and guide their decision-making toward effective policy interventions. Originality/value - This study’s empirical findings add significant value to the existing literature by quantifying the impact of macroeconomic and governance factors on digitalization in selected countries. This offers valuable insights for policymakers, particularly in nations with lower levels of digitalization.

Suggested Citation

  • Md Aslam Mia & Md Imran Hossain & Sunil Sangwan, 2024. "Determinants of digitalization: Evidence from Asia and the Pacific countries," Digital Transformation and Society, Emerald Group Publishing Limited, vol. 3(4), pages 340-358, March.
  • Handle: RePEc:eme:dtspps:dts-10-2023-0097
    DOI: 10.1108/DTS-10-2023-0097
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    More about this item

    Keywords

    Digitalization; Determinants; Technology; Internet subscription; Fixed broadband subscription; H54; L96; O14;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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