THE RELATIONSHIP BETWEEN DIGITALISATION AND ECONOMIC GROWTH: A CASE OF BRICS-T COUNTRIES

Abstract

Digitalisation enables productivity gains and accessibility as one of the key drivers of economic growth. In addition, digitalisation supports innovation and sectoral development, as well as the transformation in education and learning methods, helping to develop skills in line with the needs of the labour market and thus creating a workforce that supports economic growth. The aim of this study is to investigate the impact of digitalisation on growth in BRICS-T countries from the developing country group by using annual data for the period 2010-2022 with the help of panel cointegration analysis. As a result of the LM bootstrap panel cointegration test developed by Westerlund and Edgerton (2007), a long-run relationship was determined. Throughout the panel, exports of information and communication technology products, the number of individuals using the Internet and the number of mobile phone subscribers were found to be positively and significantly related to growth. The most influential variable on growth is determined as exports of information and communication technology products. In the model, the coefficient of the error correction term is negative and statistically significant. In other words, the error correction mechanism of the model is working and a short-term relationship is determined. The coefficients are lower in the short run. Independent variables are less effective on growth in the short run than in the long run.