From Globalization to Innovation: Investigating the impact of R&D, Internet Penetration, and Economic Factors on Digitalization in BRICS

Marc Audi, Khalil Ahmad, Marc Poulin and Amjad Ali

MPRA Paper from University Library of Munich, Germany

Abstract: Digitalization has become a pivotal force shaping global trade and economic development, particularly across emerging economies. BRICS nations demonstrate diverse trajectories of digital expansion that reflect varying degrees of globalization, technological adoption, and policy frameworks. This study examines how different dimensions of globalization (economic, social, and political), along with internet penetration, R&D investment, GDP growth, and exchange rate movements, collectively influence digitalization in the BRICS economies. Employing panel data from 2000 to 2022, the analysis uses multiple econometric techniques, panel regression (fixed and random effects), robust least squares, fully modified OLS, dynamic OLS, and panel quantile regression, to capture both short-run and long-run dynamics, as well as distribution-specific impacts on ICT goods exports. Economic globalization, R&D expenditure, and GDP growth consistently show positive and significant effects on digitalization, broader internet penetration is especially critical at early stages. Social and political globalization produce nuanced outcomes depending on institutional and cultural contexts, while currency depreciation exerts a generally negative impact by making technology imports more expensive. The results underscore that BRICS policymakers should stabilize macroeconomic conditions, invest in R&D, expand internet access, and strategically engage with global markets to foster inclusive digital growth. Tailored governance measures and targeted capacity-building efforts are also vital for translating globalization benefits into sustainable digital transformation across these emerging economies.

Keywords: Globalization; Digitalization; Internet Penetration; R&D (search for similar items in EconPapers)
JEL-codes: O3 O4 (search for similar items in EconPapers)
Date: 2025
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