Journal of Digital Content Management

Journal of Digital Content Management

The Moderating Impact of Development Level and Institutional Quality on the Relationship Between Digitization and the Added Value of Industrial Sector

Document Type : Original Article

Authors
Department of Technology Management, Faculty of Management and Economics, Science and Research Unit, Islamic Azad University, Tehran, Iran
Abstract
Purpose: This study investigates the relationship between digitization and industrial added value in 28 Islamic countries, with particular emphasis on the moderating roles of institutional quality and economic development.
Method: Using a dynamic Difference Generalized Method of Moments (Difference GMM) estimator, the study analyzes data from 28 Islamic countries over the period 2010–2022 to examine the direct and conditional effects of digitization on industrial added value, considering the moderating roles of institutional quality and economic development.
Findings: The findings indicate that digitization does not have a statistically significant direct effect on industrial added value at the average levels of institutional quality and economic development. However, its effect is conditional on country-specific characteristics. Institutional quality significantly strengthens the contribution of digitization to industrial added value, suggesting that effective governance and sound regulatory frameworks enhance countries’ ability to translate digital technologies into industrial productivity gains. In contrast, the interaction between digitization and economic development is negative, indicating that the marginal contribution of digitization declines as countries become more economically developed. The results also show that labor force participation and gross capital formation remain significant drivers of industrial added value, whereas trade openness does not have a statistically significant independent effect.
Conclusion: The findings demonstrate that the industrial benefits of digitization are context dependent rather than universal. Accordingly, digital transformation strategies should be complemented by institutional reforms and adapted to countries’ stages of economic development to enhance the contribution of digitization to sustainable industrial development in Islamic countries.
Keywords

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Volume 7, Issue 4 - Serial Number 15
Autumn 2026
Pages 149-184

  • Receive Date 21 December 2025
  • Revise Date 23 July 2026
  • Accept Date 22 August 2026