Uneven Gains from Digitalization: The Moderating Role of Human Capital in Subnational Export Performance in Indonesia

Abstract

technology and human capital jointly shape export performance, particularly in developing economies. This study examines the impact of digital technology, combined with high-quality human capital, on export performance across Indonesian provinces. Using fixed effects panel regression and quantile regression methods on provincial-level data from 2015 to 2023, the analysis captures both average effects and distributional heterogeneity. The results indicate that digital technology has a significant positive impact on exports, with this effect being stronger in provinces with higher levels of human capital. The interaction between digitalization and human capital is statistically significant, confirming their complementary role in enhancing export capacity. However, quantile regression findings reveal that the benefits of digitalization are more pronounced in provinces with higher export performance, while less developed regions remain less responsive. These results suggest that digital and human capital alone are insufficient in lagging regions without supporting structural conditions. Policy strategies should thus integrate digital and human development with targeted interventions to strengthen absorptive capacity, infrastructure, and institutional readiness, ensuring inclusive and regionally balanced export growth.

Keywords: Digital Technology; Human Capital; Export Performance; Regional Development.