The Impact of Digitalization to Accelerate Economic Performance During COVID-19 Pandemic
DOI:
https://doi.org/10.53572/ejavec.v6i2.92Keywords:
Digitization, Economic Performance, Digital CompetitivenessAbstract
The COVID-19 pandemic has affected various lines of life, especially the economy, not only in Indonesia in general but also in East Java Province in particular. The pandemic conditions limit human physical activity and make the use of digital technology increasingly massive. Using digital competitiveness data (EV-DCI), as well as other digitization indicators obtained from Badan Pusat Statistik (BPS), this study attempts to investigate the impact of digitization at the district/city level in East Java Province and at the provincial level in Indonesia on regional economic performance indicated with an increase in GDP per capita. From the OLS method used, it was found that increasing the use of internet access at the city/district level in East Java Province can significantly increase GRDP per capita. Furthermore, the researcher also uses the 2SLS method in analyzing the impact of digital competitiveness on improving economic performance at the provincial level. Similar results were found where increasing digital competitiveness can significantly improve economic performance. Through qualitative analysis, this study suggests relevant policymakers, especially in the East Java Province, encourage digitization, one of which is through the adoption of e-commerce by MSMEs.
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Annur, C. M. (2022, March 23). Ada 204,7 Juta Pengguna Internet di Indonesia Awal 2022. Katadata. https://databoks.katadata.co.id/datapublish/2022/03/23/ada-2047-juta-pengguna-internet-di-indonesia-awal-2022
Badan Pusat Statistik. (2022). Sistem Informasi Rujukan Statistik - View Indikator. Sirusa.Bps.Go.Id/. https://sirusa.bps.go.id/sirusa/index.php/indikator/74
Badan Pusat Statistik. (2022). Provinsi Jawa Timur Dalam Angka 2022. https://jatim.bps.go.id/publication/2022/02/25/33699f6fcd84e0e2a0ad96f0/provinsi-jawa-timur-dalam-angka-2022.html
Bai, C., Quayson, M., & Sarkis, J. (2021). COVID-19 pandemic digitization lessons for sustainable development of micro-and small-enterprises. Sustainable Production and Consumption, 27, 1989-2001.
Bank Indonesia (2022). Laporan Perekonomian Provinsi Jawa Timur Februari 2022. https://www.bi.go.id/id/publikasi/laporan/lpp/Pages/Laporan-Perekonomian-Provinsi-Jawa-Timur-Februari-2022.aspx
Batuo, Michael Enowbi. 2015. “The Role of Telecommunications Infrastructure in the Regional Economic Growth of Africa.” Journal of Developing Areas 49(1): 313–30.
Datta*, A., & Agarwal, S. (2004). Telecommunications and economic growth: a panel data approach. Applied Economics, 36(15), 1649-1654.
Dinas Koperasi dan UKM Provinsi Jawa Timur. (2022). Dinas Koperasi dan UKM Provinsi Jawa Timur. https://diskopukm.jatimprov.go.id/home
East Ventures, & K.I.C. (2020). East Ventures Digital Competitiveness Index 2020. https://east.vc/dci/
East Ventures, & K.I.C. (2021). East Ventures Digital Competitiveness Index 2021. https://east.vc/dci/
Evangelista, R., Guerrieri, P., & Meliciani, V. (2014). The economic impact of digital technologies in Europe. Economics of Innovation and new technology, 23(8), 802-824.
Georgiou, M. N. (2009). E-commerce has a positive impact on economic growth: A panel data analysis for Western Europe. Available at SSRN 1484687.
Goyal, R., S. Creane, A. M. Mobarak, and R. Sab. 2004. Financial sector development in the Middle East and North Africa. IMF Working Paper No WP/04/201, International Monetary Fund, Washington, DC.
Irawan, T. (2013). ICT and economic development: comparing ASEAN member states. International Economics and Economic Policy, 11(1–2), 97–114. https://doi.org/10.1007/s10368-013-0248-5
Kominfo, P. (2022). Pola Kemitraan di Sektor Pertanian Mampu Tingkatkan Pendapatan. Website Resmi Kementerian Komunikasi Dan Informatika RI. https://www.kominfo.go.id/content/detail/40888/pola-kemitraan-di-sektor-pertanian-mampu-tingkatkan-pendapatan/0/berita
Levine, R., N. Loayza, and T. Beck. 2000. Financial intermediation and growth: Causality and causes. Journal of Monetary Economics 46 (1):31–77. doi:10.1016/S0304-3932(00)00017-9.
Mammadli, E., & Klivak, V. (2020). Measuring the effect of the Digitalization. Available at SSRN 3524823.
Manyika, J., & Roxburgh, C. (2011). The great transformer: The impact of the Internet on economic growth and prosperity. McKinsey Global Institute, 1(0360-8581).
Mohanty, Ranjan K., and N. R. Bhanumurthy. 2019. Analyzing the Dynamic Relationship between Physical Infrastructure, Financial Development and Economic Growth in India. Asian Economic Journal 33(4): 381-403.
Myovella, G., Karacuka, M., & Haucap, J. (2020). Digitalization and economic growth: A comparative analysis of Sub-Saharan Africa and OECD economies. Telecommunications Policy, 44(2), 101856.
Ribeiro-Navarrete, S., Botella-Carrubi, D., Palacios-Marqués, D., & Orero-Blat, M. (2021). The effect of digitalization on business performance: An applied study of KIBS. Journal of Business Research, 126, 319-326.
RVSPK, R., Priyanath, H. M. S., & Megama, R. G. N. (2020). Digital literacy, business uncertainty & economic performance: An empirical study of small businesses in Sri Lanka. Journal Of Academic Research In Business And Social Sciences, 10(5), 50-76.
Sabbagh, K., Friedrich, R., El-Darwiche, B., Singh, M., Ganediwalla, S. A. N. D. E. E. P., & Katz, R. A. U. L. (2012). Maximizing the impact of digitization. The global information technology report, 2012, 121-133.
Sahoo, Pravakar, Ranjan Kumar, Dash, and Geethanjali, Nataraj. 2012. “China’s Growth Story: The Role of Physical and Social Infrastructure.” Journal of Economic Development 37 (1): 53–75.
Srivastava, S. C., & Teo, T. S. (2010). E-government, e-business, and national economic performance. Communications of the association for information systems, 26(1), 14.
Stankovic, J., Marjanovic, J., Drezgic, I. S., & Popovic, Z. (2021). The Digital Competitiveness of European Countries: A Multiple-Criteria Approach. J. Compet, 13, 117-134.
Stanley, T. D., Doucouliagos, H., & Steel, P. (2018). Does ICT generate economic growth? A meta?regression analysis. Journal of Economic Surveys, 32(3), 705-726.
Szyma?ska, Daniela, and Jadwiga, Biega?ska. 2012. “Infrastructure’s and Housing’s Development in the Rural Areas in Poland—Some Problems.” Journal of Infrastructure Development 4 (1): 1–17.
Toader, E., Firtescu, B. N., Roman, A., & Anton, S. G. (2018). Impact of information and communication technology infrastructure on economic growth: An empirical assessment for the EU countries. Sustainability, 10(10), 3750.
Van Ark, B. (2015). Productivity and digitilization in Europe: Paving the road to faster growth. Digiworld Economic Journal, (100), 107.
Van, L. T. H., Vo, A. T., Nguyen, N. T., & Vo, D. H. (2021). Financial inclusion and economic growth: An international evidence. Emerging Markets Finance and Trade, 57(1), 239-263.
Yoo, T., de Wysocki, M., & Cumberland, A. (2018). Country digital readiness: Research to determine a country’s digital readiness and key interventions. Cisco Corporate Affairs. May. Available online: https://www. cisco. com/c/dam/assets/csr/pdf/Country-Digital-Readiness-White-Paper-US. pdf
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Published
2022-09-29
How to Cite
Alif Ihsan A Fahta, Anggita Fiorella Moreni, & Adzrani Anggita. (2022). The Impact of Digitalization to Accelerate Economic Performance During COVID-19 Pandemic. East Java Economic Journal, 6(2), 253–270. https://doi.org/10.53572/ejavec.v6i2.92
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