A Panel Regression Analysis of the Role of Globalization and Internet penetration on Economic Development in the Czech Republic and Slovakia.

Abstract

It is evidently clear that globalization is seen widely in recent times as a means of a knowledge-based economy, and more importantly, an instrumental indicator to influence economic development. For this reason, some researchers are increasingly interested in how globalization impacts our society leading to economic growth. In this paper, we investigate the relationship between globalization, internet penetration, and economic development in the Czech Republic and Slovakia. Panel Regression analysis is employed to analyze twenty-two-year panel data (from 2000 to 2022), using secondary data from the World Bank, OECD, and UNDP databases of the selected countries. We analyze globalization variables such as trade openness, and internet penetration as independent variables and used infrastructural investment, political instability index, and labor force participation rate as control variables. Also, with economic development as a dependent variable, we used the Human development index, and GNI per capita to ascertain the effect of globalization and internet penetration on economic development. The results showed a significant positive correlation between trade openness with HDI and GNI in both Czech and Slovakia. The analysis also found that internet penetration has a significant impact on HDI and GNI in Czech, but not on GNI in Slovakia. This study highlights the important role that globalization and internet penetration play in economic development and provides valuable insights for policymakers in Czech and Slovakia. The findings of this study contribute to the existing literature on the relationship between globalization, internet penetration, and economic development.