Digitalisation, institutions and governance, and diffusion: Mechanisms and evidence




Labhard Vincent, Lehtimäki Jonne, Baccianti Claudio

PublisherEuropean Central Bank

2022

European Central Bank working paper series

2675

1

44

978-92-899-5124-1

1725-2806

DOIhttps://doi.org/10.2866/944440

https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2675~8faf37ac20.en.pdf

https://research.utu.fi/converis/portal/detail/Publication/177595680

Published also 2025 in Economics of Innovation and New Technology: https://doi.org/10.1080/10438599.2025.2517650



Digitalisation can be described as a sequence of technology and supply shocks which affect the economy through employment and labour markets, productivity and output, and competition and market structure. This paper focuses on how digitalisation-the process of diffusion of digital technologies-is affected by institutions and governance. It discusses a number of theoretical mechanisms and empirical evidence for different sets of European and other countries. The results indicate that a higher quality of institutions is usually associated with both a greater speed of diffusion and a greater spread of digital technologies. The results also suggest that there are large, policy-relevant differences in the diffusion process depending on the level of development as well as the state of technological change of a country.


Last updated on 2025-25-08 at 08:53