THE INFLUENCE OF DIGITAL SECTOR DEVELOPMENT ON ALGERIA'S ECONOMIC TRAJECTORY
DOI:
https://doi.org/10.15407/economyukr.2026.03.041Keywords:
ICT index; Internet usage; Economic Growth; STAR modelAbstract
This study presents a rigorous empirical investigation into the asymmetric influence of digital economy indicators on Algeria's economic growth between 2005 and 2022. Employing an advanced Nonlinear Smooth Transition Autoregressive (STAR) methodology, the research establishes the Logistic STAR (LSTAR) model as the optimal framework, thereby moving beyond the limitations of conventional linear analyses. The model successfully captures the dynamics of economic growth as it shifts smoothly between two distinct regimes, with estimations indicating that these transitions occur rapidly. The core finding reveals a non-uniform relationship; shocks to the internet usage index exert an asymmetric effect on economic growth, where positive and negative changes yield disproportionate impacts. Moreover, the analysis delineates that internet usage is a more potent and pivotal determinant of growth compared to the broader ICT index, highlighting the paramount importance of internet connectivity within Algeria's digital economic landscape.
By empirically examining these nonlinear relationships, this research addresses a significant gap in the scholarly discourse. The substantive contribution of the work lies in its innovative methodological approach, its timely focus on digital transformation, and its explicit policy relevance. The evidence-based insights generated possess considerable practical utility, offering a valuable framework for policymakers in Algeria and other comparable developing economies. Consequently, the findings are strategically positioned to inform and shape effective policy strategies aimed at leveraging digital tools with a specific emphasis on enhancing internet access and penetration to ultimately foster sustainable and resilient economic development.
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