The impact of digitalization, education, and institutional quality on economic growth: A comparative analysis between Sub-Saharan Africa and Middle East Countries

Digitalization, education, and institutional quality emerge as key drivers with the potential to unlock global economic growth. This study analyses their impact on economic growth by comparing Sub-Saharan Africa (SSA) and Middle East (ME) economies. Using an annual panel dataset from 2005 to 2021 for 14 SSA and 9 ME countries and the Pooled Mean Group (PMG) model, the study finds that digitalization, education, and institutional quality positively influence economic growth in both regions. However, institutional quality has an insignificant influence on ME. Digitalization and education are more advanced in the ME, whereas institutional quality is more robust in SSA. The interaction between digitalization and education has a weaker impact, while the interaction between digitalization and institutional quality positively influences economic growth in both regions. Gross domestic savings significantly and positively impact SSA but negatively and insignificantly affect the ME. Labor positively influences both regions but is insignificant for SSA, with a higher impact in the ME. Policymakers should invest in digital infrastructure and education to enhance economic growth, human capital (HC), competitiveness, and productivity and promote sustainable growth through the rule of law.