Impact of digitalization on economic growth in middle and high income countries
Since the fourth industrial revolution (IR 4.0), there is a stark difference in terms of economic growth between high income and middle income countries, where the former exhibits higher economic growth. Simultaneously, there exist a digital divide between these two income groups when...
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| Format: | Thesis |
| Language: | English |
| Published: |
2020
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| Online Access: | http://psasir.upm.edu.my/id/eprint/89890/1/SPE%202020%2027%20-%20ir.pdf |
| _version_ | 1825936727718494208 |
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| author | Muzafar Shah, Khairul Amirul |
| author_facet | Muzafar Shah, Khairul Amirul |
| author_sort | Muzafar Shah, Khairul Amirul |
| collection | UPM |
| description | Since the fourth industrial revolution (IR 4.0), there is a stark difference in terms of
economic growth between high income and middle income countries, where the former
exhibits higher economic growth. Simultaneously, there exist a digital divide between these two
income groups when looking at three components of digitalization namely the number of
individuals using the internet, number of mobile cellular subscriptions and fixed broadband
subscriptions. Which begs the question, is it just a coincidence or are these components
contributing toward the growth of these high income countries’ economy? If so, how does other
country with low digitalization try to narrow or close the gap of the digital divide? Therefore,
the first objective of the study is to examine the effects of digitalization on economic
growth, where digitalization is measured by the three components stated above. Also, to reduce the
digital divide, we look at the second objective, which is to identify the determinants of the
digital divide. The Generalized method of moments (GMM) panel data analysis is used to estimate the
model comprising data from more than 120 countries, consist of countries in the high and middle
income groups, from the years 2000 to 2017. The empirical result shows that all component of
digitalization used are positively and statistically significant determinants of economic growth
for both countries in high and middle income. Based on the countries’ income groups,
urbanization, trade openness, age population and human capital are found to be able to
influence the adoption of either one, two or all three of the digitalization components in this
study. At which, policy makers could devise a plan or approach to generate more trade
openness, to incorporate digitalization in workplace and to provide better knowledge
of digitalization, as well as to focus on increasing internet penetration rate. |
| first_indexed | 2024-03-06T10:48:42Z |
| format | Thesis |
| id | upm.eprints-89890 |
| institution | Universiti Putra Malaysia |
| language | English |
| last_indexed | 2024-03-06T10:48:42Z |
| publishDate | 2020 |
| record_format | dspace |
| spelling | upm.eprints-898902021-12-06T04:22:57Z http://psasir.upm.edu.my/id/eprint/89890/ Impact of digitalization on economic growth in middle and high income countries Muzafar Shah, Khairul Amirul Since the fourth industrial revolution (IR 4.0), there is a stark difference in terms of economic growth between high income and middle income countries, where the former exhibits higher economic growth. Simultaneously, there exist a digital divide between these two income groups when looking at three components of digitalization namely the number of individuals using the internet, number of mobile cellular subscriptions and fixed broadband subscriptions. Which begs the question, is it just a coincidence or are these components contributing toward the growth of these high income countries’ economy? If so, how does other country with low digitalization try to narrow or close the gap of the digital divide? Therefore, the first objective of the study is to examine the effects of digitalization on economic growth, where digitalization is measured by the three components stated above. Also, to reduce the digital divide, we look at the second objective, which is to identify the determinants of the digital divide. The Generalized method of moments (GMM) panel data analysis is used to estimate the model comprising data from more than 120 countries, consist of countries in the high and middle income groups, from the years 2000 to 2017. The empirical result shows that all component of digitalization used are positively and statistically significant determinants of economic growth for both countries in high and middle income. Based on the countries’ income groups, urbanization, trade openness, age population and human capital are found to be able to influence the adoption of either one, two or all three of the digitalization components in this study. At which, policy makers could devise a plan or approach to generate more trade openness, to incorporate digitalization in workplace and to provide better knowledge of digitalization, as well as to focus on increasing internet penetration rate. 2020-01 Thesis NonPeerReviewed text en http://psasir.upm.edu.my/id/eprint/89890/1/SPE%202020%2027%20-%20ir.pdf Muzafar Shah, Khairul Amirul (2020) Impact of digitalization on economic growth in middle and high income countries. Masters thesis, Universiti Putra Malaysia. Technology - Economic aspects Developing countries - Economic conditions Economics - Developing countries |
| spellingShingle | Technology - Economic aspects Developing countries - Economic conditions Economics - Developing countries Muzafar Shah, Khairul Amirul Impact of digitalization on economic growth in middle and high income countries |
| title | Impact of digitalization on economic growth in middle and high income countries |
| title_full | Impact of digitalization on economic growth in middle and high income countries |
| title_fullStr | Impact of digitalization on economic growth in middle and high income countries |
| title_full_unstemmed | Impact of digitalization on economic growth in middle and high income countries |
| title_short | Impact of digitalization on economic growth in middle and high income countries |
| title_sort | impact of digitalization on economic growth in middle and high income countries |
| topic | Technology - Economic aspects Developing countries - Economic conditions Economics - Developing countries |
| url | http://psasir.upm.edu.my/id/eprint/89890/1/SPE%202020%2027%20-%20ir.pdf |
| work_keys_str_mv | AT muzafarshahkhairulamirul impactofdigitalizationoneconomicgrowthinmiddleandhighincomecountries |