Digital Transformation and Economic Sustainability: A comparative analysis of Romania, Poland and Hungary

Abstract

This paper investigates the impact of fixed broadband penetration on labor productivity in three Central and Eastern European countries: Romania, Poland, and Hungary. The accelerated digitization of European economies has become an essential element in national and European development strategies, especially in the context of the transformations imposed by recent crises. This paper analyzes to what extent investments in digital infrastructure – particularly the expansion of high-speed internet networks – contribute to increasing economic efficiency, with a focus on labor productivity. The analysis is based on annual data collected from 2014 to 2023, using simple linear regression models for each country in order to capture national specificities. However, the intensity and consistency of this relationship vary among the three analyzed states, suggesting an important role of the institutional context, the level of digital literacy, and public policies in maximizing the economic benefits of digitalization. The work does not limit itself to highlighting a simple correlation, but also emphasizes the necessary conditions for digitization to generate sustainable long-term effects. In this regard, elements such as the quality of governance, support strategies for SMEs in the process of digital transformation, reducing regional disparities in digital infrastructure, and stimulating innovation through coherent policies are discussed. In conclusion, the study proposes a set of public policy recommendations, focusing on expanding infrastructure in rural areas, developing the digital skills of the workforce, supporting the digital transformation of small and medium-sized enterprises, as well as strengthening the institutional framework. These measures are essential to fully harness the potential of digitalization and to ensure sustainable economic development in the emerging economies of Europe.