What is the significance of baud rate in digital communication?

The significance of baud rate in digital communication is that it refers to the rate at which digital pulses are transmitted. Specifically, baud rate measures the number of signal changes, or symbols, that occur per second in a transmission. Each change in the signal can represent one or more bits of data, depending on the modulation technique used. Understanding baud rate is crucial because it affects the speed and efficiency of data transmission over communication channels. A higher baud rate can lead to faster data transfer, making it an important parameter in designing and evaluating communication systems.