Contribution of E-business in Economic Growth of Bahrain Ishaq Mohammad Salam Khattak AMA International University ishaqmsk@gmail.com Muhammad Abrar ul Haq AMA International University abrar.haq@amaiu.edu.bh Farheen Akram AMA International University f.akram@amaiu.edu.bh Hafiz Abid Malik Arab Open University hafiz.abid@live.iium.edu.my Abstract We are living in an era of information and technology that have given us an upper hand in benefiting from the innovation that has been invented for a different cause. Talking about e-business one thing we all have in mind is 'the activities taking place online' in terms of buying and selling products & services, where neither the buyers nor sellers physically interact with each other, where the buyer is a consumer and the seller being the merchant processes the trade via the internet. This research analyzed how the economic growth of the country is getting impacted by e-business. For this purpose, the data from 1982 to 2018 have been extracted from data stream repository, government data bank, ministry of finance and national economy (Kingdom of Bahrain) and world bank data. As per our economic growth model, the study identified the hypotheses that consist of three variables (e-business, population growth, saving rate) that affect the most the economic growth. The current study has applied the Autoregressive Distributed Lag model for the empirical analysis, as the extracted data's stationary level was generated via the UNIT Root to test the data is stationary. The empirical results of the study concluded that e-business is significant at 1% with the beta value of 0.10, saving rate is significant at 5% with the beta value of 0.25 and population growth is significant at 10% with the beta value of 0.60. Lastly, the study strongly suggested that government spending should emphasize on technology enhancement, literacy rate as well as internet penetration, as these things mainly focus to e-business business that further boost the gross domestic product of the country. Keywords: Economic growth; e-business; population growth; saving rate I. INTRODUCTION Word ‘e-business’ that comes with a broad horizon of all the commercial activities with the help of internet which is a platform used to carry out all e-business transactions which consists of a variety of business activities (such as, business, services activities etc.). Most of the e-business trade around the globe is held within the matter of clicks on the internet and being served to the consumer. We are living in an era of information and technology that have given us an upper hand in benefiting from the innovation that has been invented for a different cause. Information technology can be adopted for the reason of developing personal skills, building up the existing nation, regional cooperation and global participation with other countries [1]. Therefore, when it comes to e-business one thing we all have in mind is “the activities taking place online in terms of buying selling products and services”, where neither the buyers nor sellers physically interact with each other, but the buyer is a consumer and the seller being the merchant processes the trade via internet. Internet was invented in World War II where the purpose was to transmit & receive the encrypted data which was communicated between the ground army and the hub station [2]. Similarly, internet usage has increased within all age groups which is a clear indication of growing computer- literacy rate at a drastic speed. Correspondingly along with the continuous enhancement in the information technology and the economic integration globally, e-business was introduced. With all the drastic change in the audience/population of the Kingdom of Bahrain has increased to take advantage of businesses and services provided online “e-business”. E-business is expanding gradually within the Kingdom of Bahrain as the Kingdom of Bahrain has the penetration rate of above 97% by 2018 of the internet usage which will gradually bring a drastic change in online shopping rate [3], as the major source used for availing the opportunity of e-business is the internet connectivity. What we need to analyze is the economic growth which is practically defined as the potential expansion of the GDP within a certain time series [4]. It is determined that e-business & information technology and computing (ITC) have become a center of growth such as political, social & economic growth. Meanwhile, transformations have widely affected the growth of multiple countries [5]. As being in the recent time of the world it is quite impossible to grow or prosper without having and online footprint. Therefore, to further grow or expand the business with a high profitability rate it is important to have visibility and be easily accessible same time keeping a note of the security option as that is the first thing a consumer will look for before making any online financial transactions. It is also important to make sure that the data is safe & secured and as per the EU General Data Protection Regulation (GDPR) which controls all the consumer data that is used by any merchant. Furthermore, there are other factors along with the technology & computer literacy that if introduced to the nation will affect the economic growth derived from e- business and its utilization, such as security of electronic payments, R&D (Research & Development) that a country needs to perform to identify the best approach for the country and its development. Key Agenda for that is generated by the developing countries is to focus on their development and economic growth which is only possible if there is an investment done on the R&D. Thereby, these two terms economic growth & economic development are not at all identical [6]. The economic development of a country is measured with the help of multiple factors such as Gross 2020 International Conference on Data Analytics for Business and Industry: Way Towards a Sustainable Economy (ICDABI) 978-1-7281-9675-6/20/$31.00 ©2020 IEEE 2020 International Conference on Data Analytics for Business and Industry: Way Towards a Sustainable Economy (ICDABI) | 978-1-7281-9675-6/20/$31.00 ©2020 IEEE | DOI: 10.1109/ICDABI51230.2020.9325595 Authorized licensed use limited to: Consortium - Saudi Arabia SDL. Downloaded on March 05,2021 at 20:35:43 UTC from IEEE Xplore. Restrictions apply.