Influence of the Digital Economy on Economic Growth: Empirical Study of a Region in Indonesia

Indonesia’s digital economy has demonstrated a positive and significant impact on economic growth across 34 provinces between 2017 and 2022, as shown through dynamic panel GMM estimation. Initial fixed-effect analyses indicated a negative relationship, but after addressing endogeneity concerns, results confirmed the digital economy’s strong contribution to growth. The findings highlight the need for enhanced ICT infrastructure, equitable digital access, skill development in the technology sector, and supportive regulations that encourage innovation and investment to sustain long-term economic development nationwide.

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