EMPIRICAL ASSESSMENT OF THE IMPACT OF DIGITALIZATION LEVEL ON ECONOMIC DEVELOPMENT IN ECO MEMBER STATES

Abstract

This paper evaluates the level of digitalization in the member states of the Economic Cooperation Organization (ECO) based on international indices. The relationship between digitalization and economic (GDP per capita), technological (internet usage, mobile subscriptions), and social (literacy, education index) factors is analyzed using a panel regression model. A statistically significant correlation was found between the Network Readiness Index (NRI) and GDP. In addition, countries were grouped according to their digital profiles using Principal Component Analysis (PCA) and K-means clustering. The results clearly reveal a digital divide between countries: economically leading nations are also ahead in terms of digital infrastructure and usage. Finally, policy recommendations are provided to reduce digital inequality, expand e-government applications, and enhance literacy and digital skills.