DIGITALIZATION AND ECONOMIC GROWTH IN PAKISTAN: AN EMPIRICAL ANALYSIS OF THE SERVICES SECTOR (2010–2024)

Abstract

The study investigates the impact of digitalization on economic growth in Pakistan’s services sector from 2010 to 2024, using an empirical approach based on multiple linear regression analysis. Digitalization was measured through four key indicators: The E-Governance Development Index, Internet Access (% of people using the internet), Mobile Cellular Subscriptions, and Fixed Broadband Subscriptions, while Economic Growth served as the dependent variable. The results from the ANOVA test (F = 2.387, p = 0.121) indicate that digitalization collectively has a positive but statistically insignificant impact on economic growth. The regression results reveal that Internet Access (B = 0.209, p = 0.131), Mobile Subscriptions (B = 0.245, p = 0.162), and Fixed Broadband (B = 0.041, p = 0.922) exert positive yet insignificant effects, whereas the E-Governance Index (B = -56.109, p = 0.021) shows a significant but negative association with growth. These findings suggest that Pakistan’s digital transformation is still in a transitional stage where digital infrastructure and governance reforms have not yet translated into consistent economic benefits. The study recommends strengthening e-governance implementation, expanding broadband and internet accessibility, and integrating digital policies with service-sector development to enhance the long-term contribution of digitalization to sustainable economic growth