Government Digitalization: A Catalyst for Innovation Across Economies
Ding Y. Chin L. Cheah J.-H. Wong K.K.S. Taghizadeh-Hesary F.
February 2026John Wiley and Sons Inc
Review of Development Economics
2026#30Issue 191 - 106 pp.
Motivated by the rapid advancement of digital technologies and their transformative impact on governance, this study investigates how government digitalization influences national innovation capability. As countries increasingly integrate digital tools to streamline public administration and enhance online service delivery, understanding its implications on innovation becomes crucial. This study employed panel data from 72 countries to empirically explore the relationship between government digitalization and national innovation capability. First, a fixed-effect model revealed a positive impact of government digitalization on national innovation capability, and this positive effect withstood robustness checks. Subsequently, three fixed-effect models with interaction terms examined the mechanisms underlying this effect, finding that government digitalization can enhance national innovation capability by improving ease of doing business, curbing corruption, and enhancing the legal environment. Furthermore, heterogeneity analysis examined and confirmed the moderating effects of telecommunications infrastructure, residents digital skills, natural resource abundance, financial development, industrial upgrading, and ruling party ideology on the relationship between government digitalization and national innovation capability. Finally, a panel threshold regression model revealed a non-linear impact of government digitalization on national innovation capability, which varied according to economic development levels. The findings of this study provide new empirical evidence for the rationality of governments digital transformation.
corruption control , government digitalization , innovation , resource curse , threshold regression
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College of Business, Yancheng Teachers University, China
School of Business and Economics, Universiti Putra Malaysia, Malaysia
Department of Econometrics, Tashkent State University of Economics, Uzbekistan
Norwich Business School, University of East Anglia, United Kingdom
Faculty of Business, Sohar University, Sohar, Oman
Department of Agribusiness and Bioresource Economics, Faculty of Agriculture, Universiti Putra Malaysia, Malaysia
Tokai University Research Institute for Environment and Sustainability (TRIES), Tokai University, Japan
Narxoz University, Almaty, Kazakhstan
College of Business
School of Business and Economics
Department of Econometrics
Norwich Business School
Faculty of Business
Department of Agribusiness and Bioresource Economics
Tokai University Research Institute for Environment and Sustainability (TRIES)
Narxoz University
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