DIGITAL ECONOMY AND INCOME INEQUALITY: AN EMPIRICAL STUDY FROM EMERGING ASIAN ECONOMIES

Abstract

This research explores how the digital economy affects income inequality across emerging economies in Asia, utilizing panel data spanning from 2010 to 2022. Although digital transformation is widely seen as a catalyst for economic expansion and broader participation, its role in shaping income distribution remains uncertain. By applying the Quantile Regression for Panel Data (QRPD) technique, this study captures how digitalization influences inequality at different segments of the income distribution. Results reveal that digital advancements are most effective in reducing inequality in countries with relatively equal income distribution, particularly at lower quantiles, where the Digital Economy Index has the strongest negative coefficient (-0.235). However, the equalizing effect weakens in nations facing higher inequality levels. Gross Domestic Product (GDP) per capita also correlates negatively with inequality, albeit with a milder effect. These findings underscore the necessity of inclusive digital development strategies that are responsive to each country’s income structure. This study enriches existing scholarship by demonstrating the value of a nuanced and underutilized methodological framework within the context of developing regions