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Data (Center) Economy: The Impact of Data Centers on Firm Performance in Developing Economies

Year: 2025

Type: article

Abstract: Data centers form the backbone of the data economy, enabling cloud computing services and AI model development. This study examines how the presence of data centers affects the performance of local firms in developing countries, where IT capital is often scarce and data centers can serve as a cost-effective alternative to in-house IT infrastructure. Using firm-level data from the World Bank Enterprise Surveys, we find that domestic data center availability is positively associated with firms’ sales, profitability, and labor productivity but not costs. These results underscore the critical role of the data center economy as the foundation of the broader digital economy, particularly in developing countries.

Source: Journal of the Association for Information Systems

Authors: Park, Jiyong, Bae, Euro

Institutions: University of Georgia, Korea Advanced Institute of Science and Technology

Language: English

Topic: ICT Impact and Policies

Subfield: Media Technology

Field: Engineering

Domain: Physical Sciences

SDGs: Industry, innovation and infrastructure, Decent work and economic growth

Open Access status: green

OpenAlex ID: W7046395018

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