Digital Transformation and Economic Growth in Developing Economies

This paper investigates the structural and transformative effects of digital technologies on economic growth, productivity, and institutional change within developing economies. While the global economy experiences rapid digital convergence, many low- and middle-income countries continue to confront structural asymmetries in data infrastructure, human capital formation, and innovation ecosystems. Drawing on recent empirical and theoretical advances in digital economics, this study constructs an integrated analytical model linking digital penetration, institutional quality, and inclusive growth outcomes. The findings from the empirical section, based on synthetic but representative data derived from observed macroeconomic indicators, show that digital investment significantly enhances productivity through network externalities, learning spillovers, and reductions in transaction costs. Moreover, the results underscore that the benefits of digitalization are contingent upon complementary factors such as R&D intensity, regulatory frameworks, and digital literacy. The study contributes to the emerging discourse on how digital transformation can advance sustainable development in the Global South and proposes policy measures that prioritize infrastructure expansion, data governance, and the integration of innovation policy into national development strategies.