DIGITAL TECHNOLOGY AND ECONOMIC GROWTH IN DEVELOPING REGIONS: A COMPARATIVE ANALYSIS OF ASIA, AFRICA, AND LATIN AMERICA

Abstract

This study examines how digital technology influences economic growth across Asian, African, and Latin American countries using panel data from 2000 to 2018. Economic growth is measured through GDP, while digital development is captured using a Digital Technology Index (DTI), along with macroeconomic stability (MES) and personal remittances (PR) as key control variables. The DTI is constructed through Principal Component Analysis (PCA) based on five indicators: fixed connectivity, mobile connectivity, ICT capital, internet usage, and investment in digital technology. To ensure robust results, four econometric models are estimated. The regional analysis shows that in Asian countries, digital technology has a positive effect on growth, while macroeconomic stability is weakly significant and remittances are strongly positive. In African countries, digital technology remains positive but statistically insignificant, whereas remittances play a significant positive role in driving growth. In Latin American countries, all three variables—digital technology, macroeconomic stability, and remittances—show a positive and statistically significant relationship with economic growth. For the full sample, the Driscoll–Kraay standard error approach is applied to address heteroskedasticity, autocorrelation, and cross-sectional dependence. The results confirm a strong and significant positive impact of digital technology on economic growth. Overall, the findings suggest that digital infrastructure and ICT-related investment play a crucial role in supporting economic performance, particularly when combined with stable macroeconomic conditions and effective use of remittance inflows.