An Empirical Assessment of the Impact of EU Digital Policies on Economic Growth

Purpose: The economies of the European Union (EU) countries are significantly affected by new developments in technology and digital transformations, requiring tailored policies to bridge gaps and boost economic development. This chapter analyses the impact of the digital economy in EU countries according to the level of economic growth. Need for study: Assessing the interaction between economic growth and digitalisation, focussing on digital transformations, digital skills, and economic growth, this chapter designs advanced theoretical and empirical research by building on certain important research issues. Methodology: The research framework relies on assessing the correlation between the Digital Economy and Society Index (DESI) and economic growth. Based on Eurostat data, this research employs panel econometric models to uncover causal relationships between digital policies and economic growth, incorporating macroeconomic variables and country-specific digital policies. The models are designed through the panel-corrected standard errors (PCSEs) method and robust regression with Huber iteration (RRHI) to ensure unbiased and robust estimates. Findings: Main findings include that digitalisation coordinates and digital skills are essential for improving economic development in the EU, with benefits for economic growth. These advances affect balance and overall performance and can support policymakers in strengthening their understanding of this scientific field. Practical implications: The degree of development and the underlying technology underlying determine how the digital economy affects economic growth. Decision-makers can utilise these results to improve digital policies within the EU, favourably impacting the economic development of EU member states.