The Impact of E-Commerce and Foreign Investment on Economic Growth in Developing Countries

Abstract

This study examines the intricate relationship between e-commerce, economic growth, foreign direct investment (FDI), and information and communication technology (ICT) infrastructure in developing countries. The rapid evolution of e-commerce presents significant opportunities for economic development, particularly in nations striving to enhance their global competitiveness. By leveraging a dataset spanning 15 years, from 2007 to 2022, this research employs a multivariate regression model to analyze the impacts of e-commerce penetration, FDI, and ICT infrastructure on economic growth indicators across a selected group of developing countries. The findings reveal a positive correlation between the growth of e-commerce and economic development, highlighting the role of digital marketplaces in fostering trade, increasing productivity, and generating employment opportunities. Furthermore, the results indicate that FDI serves as a catalyst for e-commerce growth, as foreign investments in technological infrastructures enhance digital capabilities and access to global markets. Additionally, robust ICT infrastructure has been shown to significantly contribute to economic performance, suggesting that investments in technology are critical for maximizing the benefits of e-commerce. Through a comparative analysis with previous studies, this research elucidates the pathways through which e-commerce, supported by FDI and ICT, drives economic growth, providing valuable insights for policymakers. The study underscores the necessity for developing countries to prioritize the establishment of comprehensive digital frameworks, regulatory environments, and investment strategies to harness the full potential of e-commerce. Ultimately, this research contributes to the growing body of literature on the economic implications of digital transformation and offers strategic recommendations for stakeholders aiming to capitalize on the opportunities presented by the digital economy.