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Digital Connectivity and Transformation in Southeast Europe: Comparative Insights from EU Member States

Author

Listed:
  • Ani Stoykova

Abstract

This paper looks at digital connectivity and the adoption of advanced technologies in five Southeast European EU countries, namely Bulgaria, Croatia, Greece, Romania, and Slovenia, using indicators from the European Commission’s Digital Decade/DESI platform and the 2024 country reports. The analysis combines descriptive comparisons and visualisations with PCA and k-means clustering to summarise how countries perform across connectivity (VHCN, 5G) and outcomes (SME digital intensity, cloud, AI use, and basic digital skills). To add a formal test, the study estimates a panel regression (random effects; Swamy – Arora) linking enterprise AI adoption to lagged connectivity, with model choice supported by a Hausman test and robustness checked using White heteroskedasticity-robust standard errors. The results point to a clear connectivity-adoption gap: Bulgaria and Romania pair strong infrastructure with weak skills and low cloud/AI uptake. Econometric evidence partially supports this link – lagged 5G is positively associated with AI adoption, while VHCN is not robust once 5G is included. Clustering identifies a catching-up group (BG, RO), an intermediate group (HR, SI), and Greece as a partial converger/outlier.

Suggested Citation

  • Ani Stoykova, 2026. "Digital Connectivity and Transformation in Southeast Europe: Comparative Insights from EU Member States," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 58-73.
    • Handle: RePEc:bas:econst:y:2026:i:4:p:58-73
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    File URL: http://archive.econ-studies.iki.bas.bg/2026/2026_04/2026_04_04.pdf
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    More about this item

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis

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