L96 - TelecommunicationsReturn

Digital transformation is reshaping economic structures worldwide, yet its implications for income inequality remain debated. This study examines the relationship between digital readiness (DR) and income inequality across twelve advanced and emerging economies from 2005-2024. Using panel regression, clustering, and machine learning approaches, the study explores trends, structural country groupings, and the determinants of inequality. The results reveal heterogeneous dynamics: emerging economies often experience inequality reductions as digital readiness improves, whereas the effects in advanced economies are weaker or insignificant. Fixed-effects models suggest that short-run increases in digital readiness may temporarily coincide with higher inequality. Clustering identifies two structural groups of countries with distinct digital and socioeconomic profiles. Overall, the findings suggest that digital transformation alone is insufficient to reduce inequality and must be complemented by policies promoting affordable connectivity, digital skills, and inclusive institutions.

In this paper, I empirically examine the relationship between telecommunications and economic growth. I use data for developing and developed countries for 2000–2016. My conclusion is that mobile penetration has a positive and significant impact on economic growth, where a onepercent increase in mobile penetration results in an increase in economic growth of 1.0–2.6 percent. Regulatory institutions have a positive and significant impact on penetration in developing countries; in developed countries, the impact of regulatory institutions is positive but not significant.