The relationship between digital development and economic growth in the European Union

Abstract

Numerous studies have proven that digital development positively affects economic growth. This study aims to confirm or refute the positive impact of digital evolution on economic growth by applying the dimensions of the International Digital Economy and Society Index (I-DESI). The analysis refers to the period 2015–2020 of the European Union member states. The study's novelty is that the I-DESI index has yet to be used in research to investigate the relationship between the digital transition and GDP production. The present study, therefore, goes one step further than the previous typical DESI-GDP models. The research uses Pearson correlation and F-statistic analysis to show the relationship between the variables. The study confirms that digital development has positively impacted the economic growth of EU member states. This result was confirmed by both Pearson and Spearman correlation. However, the results are ambivalent. The empirical results indicate that the more digitally developed member countries had a higher GDP per capita. However, the positive effect is different. The results confirm that the development of digitalization and GDP increased more dynamically in the more digitally developed EU member states than in the less developed member states. Therefore, an increase in the backwardness of the less developed member countries and not a catch-up can be observed in the period under review.