The Impact Of The Digital Economy On Economic Growth: Theoretical Foundations, Transmission Mechanisms And Empirical Evidence
DOI:
https://doi.org/10.57033/mijournals-2026-2-0291Keywords:
digital economy, economic growth, ICT, broadband, productivity, general purpose technology, digital divide, digital transformationAbstract
The rapid diffusion of the Internet, mobile communications, digital platforms and data-driven technologies has made the digital economy one of the central drivers of contemporary economic development. This article examines the impact of the digital economy on economic growth by synthesising growth theory, the economics of general purpose technologies and recent empirical research. The analysis shows that digital technologies influence growth through several mechanisms: reducing search, replication, transportation, tracking and verification costs; raising labour productivity and total factor productivity; stimulating innovation and new business models; expanding market access; and transforming labour markets. Cross-country and micro-level studies generally confirm a positive relationship between digital development and growth, although its magnitude depends on complementary investments in skills, institutions and organisational change. The article also discusses the productivity paradox, the digital divide and the concentration of platform markets, and proposes policy recommendations for developing and transition economies.Downloads
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