An investigation into closing the global digital divide
Keywords:
economic growth, digital infrastructure, city development, official development assistance (ODA)Abstract
Aim: This paper aims to investigate the impact of digitalisation and city development on the economic growth of developing countries in the context of narrowing the digital divide and the significance of digital skills in various economic sectors, particularly in light of the 'servitisation' trend.
Methodology: The study employs empirical analysis using data from the OECD Creditor Reporting System (CRS) database to examine the effects of Official Development Assistance allocated for digital infrastructure and urban/rural development. The analysis includes regression models to test the relationship between ODA, digitalisation, and economic growth while controlling for factors such as the youth population ratio and urbanisation.
Results: The results indicate that increasing per-capita ODA for digital infrastructure and city development is associated with a significant increase in annual economic growth of the recipient country. Specifically, doubling the amount of ODA received for these purposes is associated with a 0.3 percentage point increase in economic growth, even after controlling for various factors such as digitalisation levels and urbanisation.
Implications and recommendations: The findings suggest that investing in digital infrastructure alongside city development projects can significantly contribute to economic growth in developing countries. Policymakers are urged to prioritise investments in digital infrastructure and city development to bridge the digital divide, promote inclusive growth, and address the challenges exacerbated by the Covid-19 pandemic.
Originality/value: This research contributes to the literature by highlighting the importance of digitalisation and city development in fostering economic growth in developing countries, particularly in the post-pandemic era. It underlines the potential of Official Development Assistance to drive positive economic changes through strategic investments in digital infrastructure and urban development.
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Copyright (c) 2026 Jean Lee, Woosik Yu
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Accepted 2025-05-22
Published 2026-03-11
