DIGITAL PAYMENTS, E-COMMERCE AND ECONOMIC GROWTH IN EMERGING ECONOMIES: EVIDENCE AND IMPLICATIONS FOR AZERBAIJAN

Abstract

This overview paper examines the channels through which digital payments and e-commerce may influence economic growth in emerging economies and evaluates the implications of those channels for Azerbaijan. The analysis synthesizes research on digital economics, information and communication technologies, payment formalization, technology adoption, platform markets and digital transformation, together with Azerbaijan-specific institutional evidence. Five recurring mechanisms emerge from the literature: reductions in search and transaction costs; formalization and access to finance; expansion of market reach for firms; consumer adoption conditioned by trust and facilitating infrastructure; and the distribution of value between domestic firms and digital platforms. The evidence indicates that digital activity is generally associated with stronger economic performance, but the relationship is neither automatic nor uniform across countries or indicators. For Azerbaijan, payment modernization creates an enabling infrastructure, while the growth effect depends on complementary capabilities in logistics, skills, competition, consumer protection and domestic value capture. The paper concludes that transaction growth should be interpreted as an intermediate indicator of digital transformation rather than as a direct measure of productivity or causal economic impact.