The Role of Digital Technologies in Capital Market Development: A Pathway to Economic Growth in Developing Countries
Digital technologies are important in developing capital markets in modern economic realities. Capital markets also have an essential role and weight in financial systems and can stimulate economic growth, investment, and savings in the country. Therefore, this research aimed to evaluate the cau...
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| Format: | Article |
| Language: | English |
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Universitas Indonesia
2025-03-01
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| Series: | International Journal of Technology |
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| Online Access: | https://ijtech.eng.ui.ac.id/article/view/7421 |
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| author | Edward Sandoyan Dmitrii Rodionov Mariam Voskanyan Ani Galstyan |
| author_facet | Edward Sandoyan Dmitrii Rodionov Mariam Voskanyan Ani Galstyan |
| author_sort | Edward Sandoyan |
| collection | DOAJ |
| description | Digital technologies are important in developing
capital markets in modern economic realities.
Capital markets also have an essential role and weight in financial systems and
can stimulate economic growth, investment, and savings in the country.
Therefore, this research aimed to evaluate the causal
relationship between market capitalization and economic growth in 27 developing
countries, focusing on the role of regional integration and digitalisation. The
hypothesis is that developing countries should focus on improving capital
markets through regional integration and digitalization to stimulate economic
growth. Quantitative data was used and based on the research results policy
recommendations were developed. The research adopted a mixed method, including
statistical and econometric analysis. The statistical analysis was carried out
using graphical representations, deduction, and logical assumptions, while the
econometric analysis was based on a panel data regression framework. The
results showed that the weak development of the capital market due to poor
digitalization in developing countries with small open economies had a
significant negative effect on the investment environment and economic growth.
Furthermore, a 10% increase in market capitalisation leads to a 1.8% and 0.21%
increase in GDP and a 0.21% increase in GDP and FDI inflow, respectively.
Recommendations on a complex institutional reform of the sector have been
developed to eliminate possible obstacles to financial integration in the
following directions, including institutional, legislative, and technical
issues related to digital technologies. Implementation of public-private
partnerships was also recommended as the best solution for overcoming financial
barriers implementing digital technologies and developing capital markets in
resource-constrained countries. |
| format | Article |
| id | doaj-art-6fd71ee6eda64edda58c4de37f7b535d |
| institution | Kabale University |
| issn | 2086-9614 2087-2100 |
| language | English |
| publishDate | 2025-03-01 |
| publisher | Universitas Indonesia |
| record_format | Article |
| series | International Journal of Technology |
| spelling | doaj-art-6fd71ee6eda64edda58c4de37f7b535d2025-08-20T03:40:22ZengUniversitas IndonesiaInternational Journal of Technology2086-96142087-21002025-03-0116257358410.14716/ijtech.v16i2.74217421The Role of Digital Technologies in Capital Market Development: A Pathway to Economic Growth in Developing CountriesEdward Sandoyan0Dmitrii Rodionov1Mariam Voskanyan2Ani Galstyan3Russian-Armenian University, H. Emin 123, 0054, Yerevan, ArmeniaPeter the Great St. Petersburg Polytechnic University, Novorossiyskaya street, 50, St. Petersburg, 194021, Russian FederationRussian-Armenian University, H. Emin 123, 0054, Yerevan, ArmeniaRussian-Armenian University, H. Emin 123, 0054, Yerevan, ArmeniaDigital technologies are important in developing capital markets in modern economic realities. Capital markets also have an essential role and weight in financial systems and can stimulate economic growth, investment, and savings in the country. Therefore, this research aimed to evaluate the causal relationship between market capitalization and economic growth in 27 developing countries, focusing on the role of regional integration and digitalisation. The hypothesis is that developing countries should focus on improving capital markets through regional integration and digitalization to stimulate economic growth. Quantitative data was used and based on the research results policy recommendations were developed. The research adopted a mixed method, including statistical and econometric analysis. The statistical analysis was carried out using graphical representations, deduction, and logical assumptions, while the econometric analysis was based on a panel data regression framework. The results showed that the weak development of the capital market due to poor digitalization in developing countries with small open economies had a significant negative effect on the investment environment and economic growth. Furthermore, a 10% increase in market capitalisation leads to a 1.8% and 0.21% increase in GDP and a 0.21% increase in GDP and FDI inflow, respectively. Recommendations on a complex institutional reform of the sector have been developed to eliminate possible obstacles to financial integration in the following directions, including institutional, legislative, and technical issues related to digital technologies. Implementation of public-private partnerships was also recommended as the best solution for overcoming financial barriers implementing digital technologies and developing capital markets in resource-constrained countries.https://ijtech.eng.ui.ac.id/article/view/7421capital marketdeveloping countriesdigitalisationeconomic growth |
| spellingShingle | Edward Sandoyan Dmitrii Rodionov Mariam Voskanyan Ani Galstyan The Role of Digital Technologies in Capital Market Development: A Pathway to Economic Growth in Developing Countries International Journal of Technology capital market developing countries digitalisation economic growth |
| title | The Role of Digital Technologies in Capital Market Development: A Pathway to Economic Growth in Developing Countries |
| title_full | The Role of Digital Technologies in Capital Market Development: A Pathway to Economic Growth in Developing Countries |
| title_fullStr | The Role of Digital Technologies in Capital Market Development: A Pathway to Economic Growth in Developing Countries |
| title_full_unstemmed | The Role of Digital Technologies in Capital Market Development: A Pathway to Economic Growth in Developing Countries |
| title_short | The Role of Digital Technologies in Capital Market Development: A Pathway to Economic Growth in Developing Countries |
| title_sort | role of digital technologies in capital market development a pathway to economic growth in developing countries |
| topic | capital market developing countries digitalisation economic growth |
| url | https://ijtech.eng.ui.ac.id/article/view/7421 |
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