The broadband diffusion process and its determinants in Algeria: A simultaneous estimation

Abstract

Digital transformation engendered by ICT advances, most notably broadband, pertains to many sectors that are known to drive economic development. This paper seeks to highlight market structure, institutional, and socio-economic factors that influence broadband adoption in Algeria. We apply to a novel 2003-2019 database a procedure that simultaneously, instead of sequentially as typically done, selects the best among the Bass, Gompertz, and Logistic innovation diffusion models estimated with Nonlinear Least Squares and searches for significant determinants of broadband adoption. We find that the data fits reasonably well the Gompertz and Logistic distributions with the latter outperforming the former not only from a statistical standpoint but also and more importantly for it captures Algeria's significant delay in the diffusion of broadband due to the social turmoil of the 1990 years’ decade. We identify some policy levers for fostering ICT applications. We find that the degree of concentration has a U-shaped impact on broadband adoption and that institutional quality, mobile broadband introduction, and tertiary education enrollment have a positive impact. These findings suggest that broadband adoption in Algeria can be expected to gain from encouraging entry with differentiated broadband services through higher-generation access technologies, improving regulatory governance, and enhancing digital literacy through higher education.

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Reference

Radia Bacha, and Farid Gasmi, “The broadband diffusion process and its determinants in Algeria: A simultaneous estimation”, TSE Working Paper, n. 22-1309, February 2022.