Does Digital Connectivity Promote Sustainable Economic Performance? Evidence from South Asian Economies

Abstract

The study examines whether digital connectivity promotes sustainable economic performance in South Asia. Adjusted net savings, including particulate-emission damage as a percentage of gross national income, is used as the dependent variable because it captures the net accumulation of produced, human, and natural capital. Digital connectivity is measured through internet use, mobile cellular subscriptions, and fixed broadband subscriptions. Annual World Development Indicators data for Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka are arranged as an unbalanced panel covering 2000-2021. The analysis applies descriptive statistics, correlation analysis, variance inflation factors, panel unit-root tests, pooled ordinary least squares, fixed-effects models, random-effects models, and specification diagnostics. Non-stationary variables are transformed before estimation. Model-selection tests support one-way individual random effects estimated with the Wallace-Hussain procedure, while Driscoll–Kraay standard errors are reported. Baseline findings show that internet use is statistically insignificant, mobile subscriptions are positive but significant only at the 10% level, and fixed broadband is positive and significant at the 5% level. The broadband result remains significant after excluding the Maldives but weakens when secondary-school enrolment is included. Overall, fixed broadband shows the strongest association with adjusted net savings, although the findings indicate correlation rather than causation within the study's limited regional sample.