The Impact of Digital Transformation on the Economic Growth of the Countries

Abstract

In the age of the Fourth Industrial Revolution, Artificial Intelligence and Digital Transformation, the effect of these significant changes on the economy’s functioning is a major concern for economists and policymakers alike. This paper seeks to study the relationship between digital transformation, economic development, productivity, and employment for a set of 155 countries. We used the Bayesian linear regression with a set of eight g-prior candidates that have been used in many previous studies (Fernandez et al. 2001; Hannan-Quinn 1979; Laud and Ibrahim 1996; Foster and George 1994). The results showed a positive relationship between digital transformation and economic development of 155 countries in the sample.