Earlier studies on the impact of foreign direct investment (FDI) on economic growth have not been instructive largely on their failure to examine the sectoral transmission channels through which FDI affects overall growth. We re–examine the impact of FDI on economic growth in Africa relying on panel data from 38 African countries over the period 1960–2014. Results from the system generalised method of moments (GMM) reveal that, while FDI positively and unconditionally spurs economic growth, its growth–enhancing effect is imaginary when the conditional sectoral effects are introduced.
This paper examines the overall economic growth effect when the growth in finance and real sector is disproportionate relying on panel data for 29 sub–Saharan African countries over the period 1980–2014. Results from the system generalized method of moments (GMM) reveal that, while financial development supports economic growth, the extent to which finance helps growth depends crucially on the simultaneous growth of real and financial sectors.
This study examines the effect of financial structure on economic growth in Sub Saharan Africa. The sample consists of both low and middle income countries, whose financial systems range from poorly developed to relatively well- developed in the context of developing countries. Using dynamic panel estimation techniques, the study investigates both the short and long-run effects of financial structure on growth, focusing on 14 SSA countries over the period 1980-2014.
The primacy of factors of production, such as labour and capital, over Total Factor Productivity (TFP) in stimulating economic growth, has long been a contentious subject in discussions on the underlying causes of economic growth. While the roles of labour and capital have been exhaustively explored, TFP still has room for further exploration, more specifically in sub-Saharan Africa (SSA).
This report discusses the evolution of institutions and compares the quality of key formal institutions (Political and Civil Liberties, Political Instability, and Property Rights) from Ghana’s colonial era to its post-independence. The Political and Civil Liberties and Political Instability are studies from 1820 to 2010, while Property Rights were analyzed for the periods 1849-2010. It has been found that, on average, the post-independent democratic regimes guaranteed the best political and civil liberties, and property rights.
This paper examines the growth effects of infrastructure stock and quality in Sub Saharan Africa (SSA). While previous studies established that the poor state of infrastructure in SSA slows economic growth, there is little evidence on infrastructure quality and a robust analysis on the causal links between infrastructure and economic growth.
This paper investigates the causal relationship between electricity supply and economic growth in South Africa using annual data covering the period between 1985 and 2014. This paper used a multivariate framework which included trade openness, electricity price, capital and employment as intermittent variables. The ARDL bound testing was employed to establish the long run relationship between these variables. The Vector Error Correction Model (VECM) was estimated to carry out the test of causality. The results support the existence of co-integration among the variables.
In the light of Africa’s palpable deficit in public infrastructure, we use System GMM to estimate a model of economic growth augmented by an infrastructure variable, for a panel of 45 Sub-Saharan African countries, over the period 2000-2011. We find that it is the spending on infrastructure and increments in the access to infrastructure that influence economic growth and development in Sub-Saharan Africa.
Basic and social infrastructure investment can assist in addressing widespread inequality and divided societies by promoting economic growth and social development. The aim of this study is to determine whether basic and social infrastructures investment differently affect economic growth and social development indicators of urban and rural municipalities. We used a balanced panel dataset containing infrastructure, economic, demographic and social indicators for rural and urban municipalities for the period from 1996 to 2012.
The study empirically establishes the causal relationship between financial innovation and economic growth in SADC. Using an Autoregressive Distributed Lag (ARDL) Model, estimated by Pooled Mean Group and Dynamic Fixed Effects, the study finds that financial innovation has a positive relationship to economic growth in long run for SADC. The long run estimations, however, show existence of a weak relationship. Introducing a direct measure of financial innovation buttresses the role of financial innovation in growth in SADC.