Endogenous growth and data heterogeneity in data economics

• Published in: Finance research letters Vol. 78; p. 107185
• Main Authors: Zhang, Wenkang, Wu, Jing
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01.05.2025
• Subjects: Consumption data; Economic growth; Product innovation; Production data; Consumption data; Product innovation; Economic growth; Production data
• ISSN: 1544-6123
• DOI: 10.1016/j.frl.2025.107185

•Based on data sources, this article distinguishes between producer data and consumer data and incorporates them into an endogenous growth model. Due to the different sources, the roles of these two types of data in economic growth are also different.•This paper expands the types of input factors in the neoclassical economic growth model and the new structural economic growth model, introducing key production factors from the digital economy era into the production sector, household sector, and data intermediary. Innovations in the Internet of Things (IoT) and Industrial IoT makes the data generation subject no longer limited to consumers, but more from the product life cycle. By integrating demand-driven consumption data and innovation-driven production data, this paper constructs an endogenous growth model with data heterogeneity. It reveals that the synergy of heterogeneous data accelerates output growth, improves innovation and higher welfare. Production data alleviate inefficiencies in data resource allocation, reduce privacy concerns, and mitigate structural unemployment. Consumption data can cause a multiplier effect on production. The model extends the theoretical boundaries of data economics and provide significant policy implications.