Suhal Kusairi

School of Economics and Business, Universitas Telkom, 

Bandung, Indonesia

suhalkusairi@telkomuniversity.ac.id

Impact of digitalisation and foreign direct investment on economic growth: Learning from developed countries

Zun Yuan Wong

Faculty of Business, Economics and Social Development, 

Universiti Malaysia Terengganu, Malaysia

wongzunyuan@gmail.com

Ratri Wahyuningtyas

School of Economics and Business, Universitas Telkom, 

Bandung, Indonesia

ratriwahyu@telkomuniversity.ac.id

Muhammad Najit Sukemi

Faculty of Business, Economics and Social Development, 

Universiti Malaysia Terengganu, Malaysia

Abstract. In recent years, progress in digitalisation and foreign direct investment has caused many structural changes, reorganisation in economics, rising productivity, globalisation, and increasing trade or international investment flows, which have led to increased capital flows and information availability. Therefore, this research investigated the impact of digitalisation and foreign direct investment on economic growth in developed countries. Panel data analysis was applied to data of 16 developed countries, from 2006 until 2019. The findings show that digitalisation - presented by mobile cellular and internet users - and foreign direct investment positively impacted economic growth, thus they strongly contribute to advancing the economy and increasing welfare. Therefore, developed countries have been learning about the critical role of technology and capital, as stated by economists over several decades, and developing countries can copy their policies into their own economic strategies.

Received: May, 2022

1st Revision: December, 2022

Accepted: March, 2023

DOI: 10.14254/2071-8330.2023/16-1/7

JEL Classification: O33, F21, C23, F43

Keywords: digitalised technology, foreign direct investment, economic growth, developed country