The Impact of Macroeconomic Determinants on the Development of the Digital Economy: A Dynamic Approach Using Panel GMM for Selected Countries

Section: Research Paper
Issue
Vol. 20 No. 69 (2026): Regional Studies Journal
Pages
403-422

Abstract

This study examines the impact of key macroeconomic determinants on the development of the digital economy in a panel of emerging and developing countries—India, Turkey, Jordan, Kuwait, Egypt, Tunisia, Qatar, Iraq, Thailand, South Africa, Morocco, Malaysia, and Indonesia—over the period 2010–2025. The analysis employs a dynamic panel approach using the Generalized Method of Moments (GMM) to address endogeneity and ensure robust results. The findings reveal that broad money and domestic credit to the private sector play a significant role in fostering digital expansion by enhancing liquidity and widening access to finance. Gross capital formation emerges as a crucial driver of digital infrastructure and technological capacity, while trade openness facilitates technology transfer and knowledge spillovers. The effect of the current account balance is found to be heterogeneous, reflecting structural differences among the sampled countries. The study concludes that strengthening macroeconomic stability, deepening financial intermediation, and promoting investment in digital infrastructure are key strategies to accelerate digital transformation and achieve sustainable economic growth.

References

  1. المصادر والمراجع
  2. Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277–297. https://doi.org/10.2307/2297968
  3. Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1), 29–51.
  4. Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115–143. https://doi.org/10.1016/0304-4076%2894%2901642-D
  5. Borowiecki, M., Pareliussen, J., Glocker, D., Kim, E. J., Polder, M., & Rud, I. (2021). The impact of digitalization on productivity: Firm-level evidence from the Netherlands. https://doi.org/10.1787/e800ee1d-en
  6. Byrne, D. M. (2022). The digital economy and productivity. Divisions of Research & Statistics and Monetary Affairs, Federal Reserve Board. https://doi.org/10.7208/chicago/9780226836348-006
  7. Chapsa, X., Tabakis, N., & Athanasenas, A. L. (2018). Investigating the catching-up hypothesis using panel unit root tests: Evidence from the PIIGS. Retrieved from https://www.um.edu.mt/library/oar/handle/123456789/30199
  8. Cialani, C. (2017). CO2 emissions, GDP and trade: A panel cointegration approach. International Journal of Sustainable Development & World Ecology, 24(3), 193–204. https://doi.org/10.1080/13504509.2016.1196253
  9. Coyle, D. (2023). Why isn’t digitalisation improving productivity growth? The Productivity Agenda, Productivity Insights Paper (022).
  10. https://www.productivity.ac.uk/wp-content/uploads/2023/11/PIP022-When-isnt-digitalisation-improving-productivity-growth-FINAL-Nov-2023.pdf
  11. Deutsche Bundesbank. (2023). The impact of digitalization on labour productivity growth. Monthly Report, March 2023.
  12. https://www.bundesbank.de/resource/blob/906616/619cb6633927dc5d02c459fc3c5afe60/mL/2023-03-arbeitsproduktivitaet-data.pdf
  13. Dyachenko, O. (2020). The theoretical basis of the digital economy in the strategic planning documents. In E3S Web of Conferences, 210, 10004. EDP Sciences.
  14. https://doi.org/10.1051/e3sconf/202021010004
  15. Eurostat. (2025, May 6). Glossary: Gross fixed capital formation (GFCF). https://ec.europa.eu/eurostat/statistics-explained/SEPDF/cache/1595.pdf
  16. Foo, Y. S., Chin, L., Chen, K. S., & Allayarov, P. (2024). Digitalization, globalization and economic growth: A panel analysis using GMM. In Proceedings of the 7th International Conference on Future Networks and Distributed Systems. 517–523. https://doi.org/10.1145/3644713.3644790
  17. GSMA. (2023). State of the Industry Report on Mobile Money. https://www.gsma.com/sotir/wp-content/uploads/2025/04/GSMA-SOTIR-2023.pdf
  18. Khera, P., Ogawa, M. S., & Sahay, M. R. (2021). Is digital financial inclusion unlocking growth? International Monetary Fund.
  19. https://www.imf.org/en/publications/wp/issues/2021/06/11/is-digital-financial-inclusion-unlocking-growth-460738
  20. Klapper, L. (2024). Expanding financial inclusion through digital financial services: A literature review. Policy Research Working Papers. World Bank.
  21. https://openknowledge.worldbank.org/entities/publication/63345b1f-0d4c-48d2-b51f-6ced20233625
  22. Mishkin, F. S. (2007). The economics of money, banking, and financial markets. Pearson Education. http://finalsite.ccsu.edu/page.cfm?p=2273
  23. Niebel, T. (2018). ICT and economic growth – Comparing developing, emerging and developed countries. World Development, 104, 197–211.
  24. Novikov, S. V., & Sazonov, A. A. (2020). Digital economy development in Russia: Main trends’ analysis and assessment. Revista Espacios, 41(5), 26. https://www.revistaespacios.com/a20v41n05/a20v41n05p26.pdf
  25. Peng, S., Jiang, X., & Li, Y. (2023). The impact of the digital economy on Chinese enterprise innovation based on intermediation models with financing constraints. Heliyon, 9(3). https://doi.org/10.1016/j.heliyon.2023.e13961
  26. Qiang, C. Z. W., Rossotto, C. M., & Kimura, K. (2009). Economic impacts of broadband. Information and Communications for Development 2009: Extending Reach and Increasing Impact, 3, 35–50. https://www.cetfund.org/wp-content/uploads/2020/08/09_World-Bank_IC4D_Broadband_35_50.pdf
  27. Tian, Z., Li, Y., Niu, X., & Liu, M. (2023). The impact of digital economy on regional technological innovation capability: An analysis based on China’s provincial panel data. PLOS ONE, 18(7), e0288065. https://doi.org/10.1371/journal.pone.0288065
  28. World Bank. (2020, February 13). Data show a rise in domestic credit in developing countries. World Bank Blogs. https://blogs.worldbank.org/ar/opendata/data-show-rise-domestic-credit-developing-countries
  29. World Bank. (2025). World Development Indicators (WDI). https://databank.worldbank.org/source/world-development-indicators
  30. Xia, Y., Lv, G., Wang, H., & Ding, L. (2023). Evolution of digital economy research: A bibliometric analysis. International Review of Economics & Finance, 88, 1151–1172. https://doi.org/10.1016/j.iref.2023.07.051
  31. Xu, M., & Li, X. (2023). Digital economy and regional innovation output: Evidence from China. Technological Forecasting and Social Change, 188, 122279. https://doi.org/10.1016/j.techfore.2022.122279

Authors

Wafi S. Suleiman Al-Suwaidi

Nineveh Tourism Institute / Ministry of Education/ Iraq

Saif Al-Din M. Abdulqader

College of Administration and Economics/ University of Mosul/ Iraq.

Rana N. Younis

College of Administration and Economics/ University of Mosul/ Mosul/ Iraq.

Identifiers

DOI: 10.33899/rsj.v20i69.63370

Download this PDF file
pdf (Arabic)

Statistics

How to Cite

The Impact of Macroeconomic Determinants on the Development of the Digital Economy: A Dynamic Approach Using Panel GMM for Selected Countries. (2026). مجلة دراسات إقلیمیة, 20(69), 403-422. https://doi.org/10.33899/rsj.v20i69.63370
Copyright and Licensing
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite

The Impact of Macroeconomic Determinants on the Development of the Digital Economy: A Dynamic Approach Using Panel GMM for Selected Countries. (2026). مجلة دراسات إقلیمیة, 20(69), 403-422. https://doi.org/10.33899/rsj.v20i69.63370