Governance quality and digital competitiveness in G20 economies: evidence from a panel data analysis
Geeta Sidharth, Vaibhav Chaudhary, Payal Jain, Anam KhanPurpose
This article examines how governance quality relates to digital competitiveness in the G20 by governance dimension and competitiveness sub-pillar.
Design/methodology/approach
The panel covers 18 G20 countries over 2018 to 2022 (N = 90). Governance is measured by the first principal component of the six Worldwide Governance Indicators. Outcomes are the IMD World Digital Competitiveness Ranking and its Knowledge, Technology and Future Readiness sub-pillars. The main specification is two-way fixed effects with country-clustered standard errors, supplemented by a Mundlak decomposition, a wild cluster bootstrap, leave-one-country-out estimation, a nine-advanced and nine-emerging split, and dynamic panel estimation.
Findings
A one standard-deviation rise in governance is associated with a 16.8-position improvement in overall rank (p < 0.01), strongest for Technology (−26.0) and intermediate for Future Readiness (−16.8). For Knowledge, it is significant between countries but not within them, consistent with human capital adjusting over longer horizons. A realistic within-country movement corresponds to 1.2 positions.
Research limitations/implications
The five-year window and small sample limit identification. Dynamic panel generalized method of moments (GMM) is uninformative at this length, so findings are reported as conditional associations rather than causal effects.
Practical implications
Regulatory quality and government effectiveness are the dimensions most consistently associated with digital competitiveness, and the rule of law with Technology. The association is stronger within emerging than advanced members, but with nine countries per group that difference is not statistically significant.
Originality/value
This is the first dimension-decomposed analysis of the governance and digital competitiveness link in the G20, and the first to show the Knowledge association is detectable between countries but not within them.