Economic issue and technological resilience of pre- and post-COVID-19

Abstract

PurposeThe purpose of this paper is to investigate the impact of COVID-19 pandemic on the changing relationship between technology and economic activity in MENA countries.Design/methodology/approachThe generalized method of moments (GMM) was applied to explore the presence of dynamic causality between technology, inflation, unemployment, foreign direct investment, trade opening, gross fixed capital formation and economic growth for 14 MENA countries before and after COVID-19.FindingsEmpirical evidence shows that the economic predictor variables change signs and impact negatively the economic growth as a result of the adverse consequences of the MENA health crisis. More interestingly, there is a unique, positive, meaningful relationship between ICT and economic growth.Originality/valueThe results show that economic resilience in MENA is significantly affected by digital infrastructure during the epidemic crisis. The authors conclude that macroeconomic adjustment and innovation improve the predictive performance of the health news model. Countries could take strong measures to support new strategies to strengthen their innovation competitiveness.