Assessing the Correlation between Digitalization and Economic Performance : An Empirical Analysis for European Countries

Ensem Mourou

doi:10.18096/TMP.2026.01.01

Authors

Ensem Mourou University of Miskolc https://orcid.org/0009-0009-2669-8914

DOI:

https://doi.org/10.18096/TMP.2026.01.01

Keywords:

Digitalization, DESI, GDP, digital economy, digital transformation, Cobb-Douglas

Abstract

The rapid evolution of information and communication technology (ICT) has resulted in significant transformations across a wide range of social and economic activities. As a result, the ongoing digitalization process is emerging as a critical force in determining progress and modernity. This study looks at the complex relationship between digitalization and economic growth in European Union (EU) countries from 2017 to 2022, using the Digital Economy and Society Index (DESI) issued by the European Commission. Our work employs a sophisticated panel data estimate approach and the fundamental Cobb-Douglas model and presents an empirical perspective on the relationship between digital technology and economic prosperity. Based on the fixed-effect panel estimate, our findings show a significant correlation: A 1% rise in digitalization (as measured by the DESI index) correlates with a 0.3838% impressive rise in GDP growth. This study emphasizes the need to comprehend and utilize digital technologies' revolutionary potential. It presents a solid argument for stakeholders and governments to embrace digital innovation and leverage it to achieve long-term, sustainable economic growth.

Author Biography

Ensem Mourou, University of Miskolc

PhD student

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