The Power of E-Government to Accelerate Economic Growth: Panel Data Analysis on the Role of E-Government in the European Union's Economic Growth

Document Type : Original Article

Authors

1 Department of Economics October University for Modern Sciences and Arts, Cairo, Egypt

2 Department of Economics Modern Sciences and Arts University Cairo, Egypt

3 Senior Trade in Services Advisor

Abstract

Despite the international recognition of the vital role of e-government in realizing economic development, few empirical studies measured the relationship between e-government and economic growth, particularly in the European Union. Thus, this paper examines the impact of e-government on per capita GDP in the European Union countries where e-government is measured in two ways: (1) the e-government enablers, represented by the United Nations E-Government Development Index and its sub-indexes, namely, telecommunication infrastructure, human capital, online service, in addition to the e-participation index; (2) Eurostat variables which gauge the individuals actual use of e-government services through three modes, particularly, obtaining information, downloading official forms, and submitting completed official forms online, in addition to the overall interaction with governments online.
A panel dataset of the 27 European Union members and the United Kingdom from 2003 to 2022 is analyzed using cluster-robust fixed and random effects models. For robustness check and to resolve the possible endogeneity and reverse causality which could exist between e-government and per-capita GDP, the Arellano–Bover/Blundell–Bond model is estimated for the second dataset using the Generalized Method of Moments (GMM). The study found that per capita GDP is positively related to all of the e-government enablers included in the e-government development indicators. Furthermore, the estimates indicate that an increase in the percentage of individuals using e-government services by 10% is associated with a 0.4% to 1.6% increase in per capita GDP depending on the type of internet use and econometric estimation method, ceteris paribus.

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