TO WHAT EXTENT KNOWLEDGE ECONOMY VARIABLES COULD HAVE DRIVEN PRODUCTION
This is shown using regression analysis where GDP from different sectors is regressed on those related to others sectors to better capture how knowledge variables have been driving production.
The data used are those from UNCTAD. The results are shown in Table 5.Table 5 shows that innovation has statistically significant effects on most sectors except for services and that education has a negative impact on agriculture. The other results show how positive interdependencies exist between the existing sectors.
However, more knowledge needs to be further mobilized to ensure production and trading efficiency besides the sustainable competitiveness required. Information technologies are known to possess the properties for enhancing productivity, trade but also series of social services.
Based on the results, a specific focus is placed in the following section on the role of ICTs as a knowledge component that could have important impact on the Arab economies.
Table 5. Regression results
| Independent Variables | ||||||||||
| Dependent Variable | Constant | INN | CONS | EDU | TRANS | SER | GAS | IND | AGR | R2 |
| GDP | 1.554 (6.483) | 0.168 (2.101) | 0.857 (10.748) | 0.876 | ||||||
| AGR | 0.743 (2.238) | -0.700 (-7.316) | 1.020 (10.667) | 0.839 | ||||||
| IND | 0.060 (0.625) | 0.030 (1.311) | 0.161 (4.291) | 0.843 (23.912) | 0.992 | |||||
| GAS | 1.043 (1.554) | 0.613 (3.961) | 0.470 (3.033) | 0.837 | ||||||
| FAB | 0.148 (0.289) | 0.641 (5.009) | 0.635 (4.961) | 0.640 | ||||||
| CONS | -0.034 (-0.080) | 0.557 (4.952) | 0.769 (6.801) | 0.719 | ||||||
| SER | 0.430 (1.976) | 0.415 (1.540) | 0.489 (0.417) | 0.466 (0.319) | bgcolor=white>0.930 ||||||
| TRANS | -1.046 (-3.349) | 0.373 (3.966) | 0.385 (3.883) | 0.617 (7.153) | 0.898 | |||||
Variables: GDP: overall domestic product; AGR= agriculture value added; IND= Industry; GAS= Gas and oil; FAB= manufacturing; CON=Construction; SER=Services; TRANS=Transportation; INN=Innovation and EDU=Education.
Data Sources: UNCTAD, most recent data.