Nonlinear and Threshold Effects of Internet Access: Evidence from North Africa

Yihuan, Lin; Wei-chong, Choo; Keng-yap, Ng; Juan, Zhang; Youyuan, Wu

مجلة الاستراتيجية والانفتاح الاقتصادي
Volume 1, Numéro 4, Pages 77-101
2026-04-13

Nonlinear And Threshold Effects Of Internet Access: Evidence From North Africa

Authors : Yihuan Lin . Wei-chong Choo . Keng-yap Ng . Juan Zhang . Youyuan Wu .

Abstract

This study examines the non-linear relationship between internet penetration and economic growth in North Africa, challenging the assumption of a universal digital dividend. Using a fixed-effects panel model for Algeria, Egypt, Libya, Morocco, and Tunisia (2000-2023), we find no significant linear effect. Instead, the relationship follows a U-shaped curve, with a threshold at approximately 33.7% penetration. Below this level, the growth impact is non-positive; above it, the effect becomes positive. Furthermore, the economic return to digital infrastructure is strongly conditioned by urbanization, with a significant positive interaction effect indicating that urban agglomerations amplify the benefits of connectivity. These results suggest that the digital dividend in the region is not automatic but contingent on achieving critical mass and complementary structural factors, notably urban development. The study provides novel empirical evidence for a threshold-based model of digital growth in North Africa, offering nuanced insights for policymakers to design phased and spatially informed digital development strategies.