The Interplay between Digitalization, Education and Financial Development: A European Case Study

Abstract

The paper explores the relationship between education, digitalization, and financial development between 1996 and 2019 with the aim of showcasing the differences between developed and emerging economies in Europe. We use a Bayesian VAR framework that includes variables related to education, digitalization, and financial development, as well as several endogenous variables to control for differences between countries in terms of nominal GDP growth, unemployment rate, and trade openness. Our findings clearly demonstrate the dynamic interdependence between financial development—including its two main components, financial institutions, and financial markets, digitalization, and education. Furthermore, we find that education is a leading variable in the financial development–education–digitalization nexus, whereas financial development and digitalization are laggard variables. These findings open possibilities for influencing joint policies on digitalization, education, and financial development, particularly in emerging European countries.

The Development of Education Digitalization in the Hinterland

“…Nowadays, digital technology is becoming a part of everyday human life. The development of digital technology supplies many benefits to humans and supplies a lot of aid in human activities (Horobet et al, 2022;Ulzytueva et al, 2021). The development of this technology will certainly bring a change in quality for the better, and make everything more efficient, such as clearer image delivery with a faster delivery process.…”