Digitalisation and Economic Growth in the European Union

The aim of the present paper is to analyse the effects of digitalisation on economic growth in the European Union. An econometric model with balanced panel data is used, with the analysis spanning over a 22-year time frame from 2000 to 2021. The main conclusion is that digitalisation generates a positive and significant impact on economic growth, even when several control variables are taken into consideration. The results prove their robustness, which is backed by the employment of the DESI as an independent variable. This paper contributes to the existing empirical analyses by extending the research on digitalisation to the entire EU, and separately for the old EU-15 member states and EU-13 new member states since, to our best knowledge, the existing literature has not approached the subject in this manner. As a policy recommendation, we suggest that public decision-makers take measures that support more harmonised digitalisation policies, favouring the new business model based on digitalisation.

Automated summary

The aim of this paper is to analyze the effects of digitalization on economic growth in the European Union. A econometric model with balanced panel data spanning from 2000 to 2021 is used. The main conclusion is that digitalization has a positive and significant impact on economic growth, even when controlling for various factors. The paper extends existing empirical research by examining digitalization in the entire EU and separately for old and new member states, which has not been done in previous literature. As a policy recommendation, the authors suggest implementing harmonized digitalization policies to support the new business model.