Leveraging the Global Innovation Index to Boost Manufacturing Efficiency in Algeria: An ARDL Model Study (2011-2022)

Souleyman Beghni and Meriyam Gourari
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Souleyman Beghni: University of Tlemcen (Algeria)
Meriyam Gourari: University of Tlemcen (Algeria)

IJEP, 2024, vol. 7, issue 02, Pages: 141-164

Abstract: This study investigates the impact of innovation inputs and outputs on the growth of Algeria's manufacturing sector from Q1 2011 to Q4 2022, employing an ARDL model to analyze 44 quarterly observations. The results indicate that innovation inputs, such as institutions, human capital and research, infrastructure, market sophistication, and business sophistication, have a statistically significant negative impact on manufacturing growth, suggesting inefficiencies or delays in realizing the benefits of innovation investments. Conversely, innovation outputs, including knowledge and technology outputs and creative outputs, exhibit a weaker and statistically insignificant negative correlation with manufacturing growth. The error correction term is highly significant, indicating a rapid adjustment towards long-run equilibrium, with 47.2% of deviations corrected each quarter. The model's strong fit, reflected by an R-squared value of 0.693658, underscores its explanatory power. However, the ARDL model oversimplifies the complex economic interactions in Algeria, potentially overlooking numerous mediating factors and the influence of regional stability and security issues on manufacturing performance. Furthermore, the context-specific findings may not be applicable to countries with different economic structures. Enhancing the efficiency of innovation investments could lead to significant growth in Algeria's manufacturing industries, with potential social impacts including broader economic development, increased employment, and social stability. This study offers valuable insights into the relationship between innovation and manufacturing growth in Algeria, highlighting the importance of efficient innovation strategies for economic development.Key words: Innovation, Knowledge, Manufacturing, ARDL Model, Algeria.

Keywords: Innovation; Knowledge; Manufacturing; ARDL Model; Algeria (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:bjm:ijep00:v:7:y:2024:i:02:id:332

DOI: 10.54241/2065-007-002-008

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