Exploring the Impact of Digital Transformation on Non-Financial Performance in Central and Eastern European Countries

This article explores the intricate relationship between digital transformation and non-financial performance in Central and Eastern European (CEE) countries. As these nations navigate the complexities of post-communist economic landscapes, the role of digitalization emerges as a pivotal factor influencing various dimensions of organizational performance beyond mere financial outcomes. In this framework, our research aims to analyze the ways in which digital transformation (as proxied by DESI) impacts a range of non-financial performance metrics (ESG) in order to furnish a thorough comprehension of the intricate interplay within the specific context of CEE countries. With data collected over an 11-year timeframe, we performed a panel data analysis, relying on a robust regression. The main findings indicate that digital transformation profoundly impacts the environmental (CO2 emissions, renewable energy consumption), social (ratio of female-to-male labor force participation rate, unemployment) and governance (government effectiveness) performance of CEE countries, although the effects vary significantly across different regions. The panel data highlight potential areas for policy emphasis, particularly in relation to reducing CO2 emissions, improving regulatory quality, and advancing digital integration and connectivity. The disparities identified may inform targeted strategies aimed at uplifting underperforming regions, thereby contributing to enhanced economic growth and sustainability.