Digitalization and economic growth: new evidence from EU countries

Today's world is on the verge of a digital transformation with the developments in information and communication technologies. The digitalization process experienced affects societies both economically and socially. Recently, digitalization has become more important in terms of economic growth and competitiveness of countries. The aim of this study is to examine the effect of digitalization on economic growth for the period 2000-2020 in 27 EU countries by using panel data analysis method. In the study, the econometric relationship between the variables was estimated using the Driscoll-Kraay (1998) standard errors estimator. In the study, exports of information and communication technology products, the number of individuals using the internet and the number of mobile phone subscribers were used as the independent variables representing the digitalization indicators. Real GDP per capita is taken to represent economic growth, which is the dependent variable. According to the findings of the research, it has been determined that digitalization indicators have a significant and positive effect on economic growth. The findings of the study support the theoretical and empirical literature that argues that digitalization will have a positive effect on economic growth. It is thought that investments to be made in digitalization and ICT infrastructure will provide significant gains.