The Impact of the Digital Economy Development on Economic Growth in RCEP Region
Abstract
The objective of this research is to investigate how the digital economy has affected economic growth within the Regional Comprehensive Economic Partnership (RCEP) region between 2010 and 2022. Using principal component analysis (PCA), the research constructs an extensive index to evaluate the level of digital economy development across 12 RCEP countries. The research aims to present solid evidence on the crucial role played by the digital economy in promoting equitable and sustainable growth in the RCEP region through benchmark regression analysis. The findings aim to provide governments and stakeholders with practical insights and policy recommendations to enhance digital economy initiatives, mitigate developmental gaps, and foster long-term economic resilience and integration in the RCEP region. This study employs a quantitative research design to analyze panel data from RCEP countries spanning 2010 to 2022, examining the impact of digital economy development on economic growth. The digital economy development index is constructed using Principal Component Analysis (PCA). The study then applies Fixed Effects (FE), Random Effects (RE), and Ordinary Least Squares (OLS) models to assess the relationship between digital economy development and economic growth. Control variables such as capital investment, labor force, trade openness, and innovation are included to ensure the robustness of the findings. The findings demonstrate that the digital economies of the RCEP member nations have advanced and varied significantly, with notable advances shown in Singapore, China, Japan, South Korea, Australia, and New Zealand. The GDP growth of the RCEP region is substantially influenced by the development of digital economy in member nations. RCEP countries could invest significantly in digital economy from infrastructure, digital government, digital integration, and human capital to enhance economic growth. This research provides a comprehensive analysis of the impact of the digital economy on economic growth within the RCEP region, employing principal component analysis (PCA) to construct an extensive index from multiple dimensions and utilizing benchmark regression. It provides unique insights into the development level and growth disparities of the digital economy across RCEP countries. By highlighting the critical roles of digital infrastructure, services, skills, and economic environment, this research adds significant value to the existing literature on digital transformation and economic development. Policymakers in the RCEP region will find particular value in the findings, which offer evidence-based suggestions for promoting equitable and sustainable economic growth through focused digital economy efforts.
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