Endogenous growth and data heterogeneity in data economics

Wenkang Zhang and Jing Wu

Finance Research Letters, 2025, vol. 78, issue C

Abstract: Innovations in the Internet of Things (IoT) and Industrial IoT makes the data generation subject no longer limited to consumers, but more from the product life cycle. By integrating demand-driven consumption data and innovation-driven production data, this paper constructs an endogenous growth model with data heterogeneity. It reveals that the synergy of heterogeneous data accelerates output growth, improves innovation and higher welfare. Production data alleviate inefficiencies in data resource allocation, reduce privacy concerns, and mitigate structural unemployment. Consumption data can cause a multiplier effect on production. The model extends the theoretical boundaries of data economics and provide significant policy implications.

Keywords: Production data; Product innovation; Consumption data; Economic growth (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:78:y:2025:i:c:s1544612325004489

DOI: 10.1016/j.frl.2025.107185

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