The Effect of Digital Transformation on Egyptian Competitiveness Using the ARDL Model

Abstract

This study aimed at assessing the “digital transformation” of Egypt and measured its effect on the country’s competitiveness during the period 1996–2019 using the autoregressive distributed lag (ARDL) model. Results showed positive relationship between the competitive performance variable (MVA) and the lag value of the same variable, as an increase in competitive performance during last year by one point led to an increase of 0.72 point in competitive performance during current year. The research and development expenditure positively affected competitive performance as one-point increase led to an increase of 0.41 point in competitive performance. The number of patents registered by individuals positively affected MVA as one-point increase led to an increase of 0.01 point in MVA. Moreover, the net foreign direct investment positively affected MVA as one-point increase led to an increase of 0.05 point in MVA, and one-point increase in the high technology exports led to an increase of 0.25 point in competitive performance. Also, the number of mobile and fixed phone lines subscribers positively affected MVA as one-point increase in the number of mobile phone subscribers per 100 people (MOB), and the number of fixed-line subscribers per 100 people (FTS) led to an increase of 0.03, 0.94 point in competitive performance, respectively. In conclusion, to achieve competitive performance in Egypt by increasing efficiency in both resources’ usage and technical productivity, the technological level in Egyptian production must be improved.