Abstract

The digital transformation has impacted society at different levels, mainly on the economic and governance levels. This paper investigates the impact of the digital economy on social governance mechanisms. Additionally, it captures the indirect effects or mediating forces such as social reforms and a sustainable digital economy. The study followed a positivism philosophy, and it is survey research influencing cross-sectional study. The unit of analysis in the current paper was employees from four different professions as economists, financial analysts, managers, and teachers. The random sampling technique was used as a sampling type, and a questionnaire was used for data collection. Structural equation modeling (SEM) was carried out as a data analysis technique. The research findings revealed that the digital economy has a favorable impact on the social governance mechanism. Likewise, the digital economy positively affects social reforms and a sustainable digital economy. Social reforms also proved to link with a sustainable digital economy positively. The output of the indirect effects and structural model confirmed that social reform played a partial mediation role between the digital economy and sustainable digital economy. Moreover, a sustainable digital economy confirmed a partial mediation between the digital economy and the social governance mechanism. Finally, analysis confirmed a serial mediation among digital economy, social reforms, sustainable digital economy, and social governance mechanism. Therefore, policymakers and government agents should improve the digital economy to have a strong social governance mechanism.

Highlights

  • The numerous adoptions of digital technologies in recent times have stimulated the huge transformational process called digitization

  • Sustaining a strong sustainable digital economy is a key component to shape up the social governance mechanism

  • The findings of the research demonstrated that the digital economy has a good impact on the social governance mechanism

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Summary

Introduction

The numerous adoptions of digital technologies in recent times have stimulated the huge transformational process called digitization. The first wave of digitization is supported by the adoption and introduction of refined technologies such as information management systems, automatic reporting and monitoring systems for business performance, broadband, voice telecommunications, including fixed and mobile. All these technologies have helped to access information remotely. The second wave transformed into the third one entailing the more advanced technologies such as the internet of things (IOT), artificial intelligence, robotics, and sensors All this advanced development focused on enhancing the information processing, automating the daily mundane tasks within the business organizations as well governments, and increasing the accuracy of the decision-making process for organizations [2,3,4]

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