Efficiency Measurement of Digitalization on EU Countries: A Study Based on Data Envelopment Analysis

Abstract

Propose: The current research aims to identify the countries that have transformed digitalisation into their growth and employment rates in the European Union countries between 2015 and 2019 and measure the relevant countries' performances (the effectiveness). Study design/methodology/approach: In the study, the five dimensions of the DESI index, Connectivity, Human Capital, Use of Internet, Integration of Digital Technology and Digital Public Services were used as input, while GDP Growth Rate and Employment Rate belonging to EU-28 countries between the years 2015-2019 were used as output. The VRS-INPUT Oriented DEA method was used to calculate the maximum output with the available inputs in the analysis. Findings: In countries such as Bulgaria, Cyprus, Hungary and Romania, it can be stated that the effective use of DESI indicators, which are considered a measure of digitalisation, has a one-on-one effect on the GDP and ER values included in the model as output. DESI indicators are not used effectively in the GDP and ER values of countries like Denmark, Finland, and Spain. In general, in terms of digitalisation, it has been revealed that developing countries use digitalisation more effectively in terms of economic growth and job creation. Originality/value: This article is a pioneering study exploring the identification of EU countries by data envelopment, translating digitalisation into growth and employment rates. In this context, current research is valuable in terms of closing a significant gap in the literature.