International Panel Data Analysis of the Effect of Digitalization on Economic Growth

The effect of digitalization on economic growth is examined with reference to a cobb-Douglas production function. So, the dependent variable is the economic growth measured by the Gross Domestic Product per capita measured at 2015 constant US dollars.
To reproduce the digitalization, we consider four indicators which are :
1. Number of fixe subscriptions (per 100 people)
2. Number of mobile cellular subscriptions (per 100 people)
3. Number of broadband subscriptions (per 100 people)
4. Number of individuals using the internet (%of population)
5. Digitalization level as obtained by applying a PCA
Moreover, we include several macro-economic variables as control variables which affect the relationship between Digitalization and economic growth:
6. Investment measured by gross fixed capital formation (as percentage of GDP).
7. Trade openness which is a country’s trade volume used as a proxy for the degree of openness of a country’s economy (as percentage of GDP) and which is measured as the sum of imports and exports.
8. Labor force which is the total of labor force participation rate.
9. Inflation is measured by the consumer price index (%).
10. Population
11. Consumption is the government consumption expenditure for goods and services (as a percentage of GDP).