INVESTIGATING MULTICOLLINEARITY BETWEEN COUNTRY’S LEVEL OF DIGITAL COMPETITIVENESS AND INFLUENCING VARIABLES

Abstract

The purpose of scientific research is to identify and argue the connection between the level of digital competitiveness of countries and variable factors, and to propose solutions for its improvement. The object of the research is the level of digital competitiveness of countries in 2023 and the variables that affect it (GDP per capita, population in the country, Digital Quality of Life Index). The subject of the study is the digital capabilities and innovative solutions of countries to strengthen their competitive position in the world in the context of globalisation. Methodology. The study is based on the method of multicollinearity according to the Farrar-Glauber algorithm, which makes it possible to understand the dependence of the level of digital competitiveness on three variable factors (GDP per capita, the number of people in the country and the Digital Quality of Life Index). The method of generalisation made it possible, on the basis of a multicollinear study, to provide recommendations for strengthening the country's digital competitiveness in the international arena, taking into account the potential of human resources, the degree of technological progress and the level of economic development. Results. The research revealed an insignificant relationship between the level of a country's digital competitiveness and GDP per capita. However, it was found that the more economically strong the state, the faster and larger the implementation of digital technologies. It has been posited that there exists a negligible relationship between a nation's digital competitiveness and its population size. Nevertheless, it is evident that as a nation's population increases, there is a concomitant rise in the number of individuals engaged in the production and implementation of innovative solutions and digital technologies. The multicollinearity study demonstrated that there is no multicollinear relationship between the level of the country's digital competitiveness and variable factors. However, it was determined that a country can acquire competitive advantages under the condition of contributing to the increase of the economic well-being of the nation and its accessibility to digital goods and services. Practical implications. The value of the publication is determined by the breadth of the author's recommendations for enhancing the Digital Quality of Life Index of the population, which, in the long term, will ensure the country's competitive position in the digital era and contribute to sustainable economic development. Value/Originality. The contribution of the article to the scientific value consists in the study of multicollinearity using the Farrar-Glauber algorithm to assess the impact on the level of digital competitiveness of such variable factors as GDP per capita (a macroeconomic indicator that indicates the well-being of the nation), the number of inhabitants of the country (an indicator that determines the intellectual potential of the country) and the Digital Quality of Life Index (characterises the accessibility and penetration of digital technologies in the life of society).