Journal 2020#2

Impact of the Economy Digitalization on Welfare in the Developed and Developing Countries



Abstract References

Digitalization is one of the key world economic trends. Countries with the wealthiest economies have integrated the digitalization program into their economic development plans. At the same time, monitoring of the digitalizationís dynamics and degree of impact on welfare is of great importance for all countries of the global community. Nowadays, there are practically no integrated studies assessing institutional, cultural, economic, educational and infrastructural consequences of the digitalization. This article assesses how the digitalization affect s the mentioned driver s o f social an d economic development . Moreover , it examines the digitalizationís impact on welfare of the developed and developing countries. The relevance of defining the effects of digitalizationís rapid implementation in various countries determined the studyís purpose. We based the methodology on building the balanced panel regression. The key metric for measuring the digitalization is the Digital Evolution Index of 50 countries for 2008, 2013 and 2017. The research findings have confirmed positive impact of the digitalization in the developed countries due to a high levels of digital inclusivity, public and private investment, and digital literacy and trust. At the same time, in the developing countries the digitalizationís impact on welfare was not confirmed due to a low level of state involvement in digitalization development and rigid, non-flexible institutional environment. The obtained empirical results can be used for forming management tools of the digitalization strategy for regions with various levels of social, economic, institutional and digital environment development.