Search

As globalization continues to shape the global economic landscape, understanding its intricate relationship with economic growth remains paramount in regions like sub-Saharan Africa. Hence, this study presents a comprehensive analysis of globalization's impact on economic growth in sub-Saharan Africa from 1971 to 2019. Using panel data from reputable databases on Trade and Development (UNCTAD), World Development Indicators, Penn World Table 10.0, and Our World Data, the paper explores various dimensions of globalization, including economic, social, and political factors. The feasible generalized least square (FGLS) estimation technique was used to analyze data. Findings reveal nuanced dynamics, with social and financial globalization indices showing positive effects on economic growth and statistically significant at 1% significance level. Additionally, this study uncovers the influence of demographic indicators, government consumption, and the rule of law on economic growth. The result of the study revealed demographic indicators, government consumption, and the rule of law had statistically significant impacts on the economic growth of sub-Sahara Africa. In contrast, certain aspects of economic globalization exhibit negative impacts. However, political, trade, information, and cultural globalization had no significant impact on economic growth of the region. It is important to recognize that the absence of significant effects does not necessarily imply an absence of impact, but rather reflects the multifaceted nature of globalization's influence on economic growth. Several factors, including differences in the periods analyzed, may account for the differences in these results compared to previous studies. This study not only adds to the existing literature on globalization and economic growth but also offers valuable insights for policymakers tasked with promoting sustainable development in sub-Saharan Africa. By acknowledging the complexities of globalization's impact, policy makers can formulate more effective strategies to harness its benefits while mitigating its potential drawbacks. This research contributes to a deeper understanding of globalization's role in economic development, laying the foundation for evidence-based policy interventions tailored to the unique challenges and opportunities facing sub-Saharan Africa. [ABSTRACT FROM AUTHOR]

Sub-Saharan Africa (SSA) is seeing exceptional urbanization and economic expansion rates. Therefore, the STIRPAT (Stochastic Impacts by Regression on Population, Affluence, and Technology) parameters and the spatial econometric framework are used in this work to examine the influence of economic growth and urbanization on SSA's CO2 emissions. Likewise, to determine the spatial effect and understand how factors influence the spatial dependence of carbon emissions, the study builds a spatial Durbin model (SDM). In line with the findings, the spatial correlation test revealed the spatial correlations across various countries. This indicates that the changes in sub-Saharan African country's CO2 emissions impacted nearby countries and the countries themselves. Additionally, the findings reveal that, in the SSA's countries, urbanization, economic growth, industrial structure, trade, and population, excluding energy intensity, which failed the significant test, all positively influence CO2 outflows, in line with the spatial econometric model's findings. Thus, energy intensity shares an adverse impact on carbon emissions. As an outcome, energy intensity reduces carbon dioxide emissions in nearby nations and the entire region. Thus, the study recommends that policymakers account for the effects of spatial spillover when establishing low-carbon policies, encouraging a low-carbon lifestyle, promoting environmentally friendly technologies, and improving regional collaboration. [ABSTRACT FROM AUTHOR]

Copyright of Hacettepe University Journal of Economics & Administrative Sciences / Hacettepe Üniversitesi Iktisadi ve Idari Bilimler Fakültesi Dergisi is the property of Hacettepe University, Faculty of Economic & Administrative Sciences and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study aims to accomplish three main tasks. Firstly, it seeks to determine the more appropriate choice between classical and Bayesian methods in estimating a pooled panel kink regression model under the condition of a known but bounded policy variable choice that serves as a kink point. Secondly, as a product of the first target, the study seeks to provide empirical evidence for the economic growth–economic freedom nexus in five top-performing economies in Sub-Saharan Africa. Using index explanatory variables, which are bounded between 0 and 100, and using both numerical and graphical methods, the findings show that the use of the Bayesian method is more appropriate in characterizing the data than the classical OLS framework, as the former better accounts for randomness via the use of posterior distributions. Finally, the study further employed both threshold and Bayesian pooled panel kink regressions, with mixed results. The Bai–Perron test confirmed that the economic freedom index has a single threshold value of 56.70. Whereas the threshold estimates show a negative impact of economic freedom on growth in both low and high regimes, the Bayesian estimates reveal that economic freedom has a negative impact on growth in a low regime but a positive impact in a high regime. Our novel findings show that there exists a nonlinear impact of economic freedom on growth. This provides some guidance and caution in charting policy paths that seek to achieve economic growth. [ABSTRACT FROM AUTHOR]

This study contributes to the literature on financial efficiency and growth. We show that banking development exerts a statistically significant and positive impact on local economic growth. We use the ARDL method to find the impact of institutional financial quality on agriculture sector growth in 14 Sub-Saharan African countries from 1990 to 2020. Our results show that land, rural population, and per capita agricultural income growth have long-run and significant (at 1% level) causal effects on the magnitude of agricultural value added as a percentage of GDP. [ABSTRACT FROM AUTHOR]

There is a strong link between water infrastructure and development outcomes. As such, water infrastructure challenges could have an adverse effect on the economy at large. This study investigates the drivers of water infrastructure performance and analyzes how investment in water infrastructure affects economic growth, focusing on a panel of thirty-one Sub-Saharan African (SSA) countries. An integrative theoretical framework using panel regressions was developed. The result showed that an increase in water infrastructure performance due to a 1% increase in per-capita income growth and trade openness was 0.2% and 0.03%, respectively, and the constraint on water infrastructure performance due to a 1% increase in population density was 0.76%. The result showed that the impact is mostly driven by the effect of per-capita income growth and population density on lower- and middle-income countries. Our results also revealed that one additional increase in water infrastructure investment leads to a higher impact on economic growth. We further complement our study by investigating the policy interventions that the support water infrastructure outcome effect. We found that investment in water infrastructure along with the provision of credit to the private sector is a strong driver of economic growth; however, access to credit beyond a certain threshold—relative to the level of investment in water infrastructure in these countries—investment in water infrastructure would lead to an adverse negative macroeconomic effect. The policy implications of this study are discussed. [ABSTRACT FROM AUTHOR]

Debates on the intricacies of tourism's potential contribution to economic growth remain imperative and unsettled in sub-Saharan Africa (SSA). Employing dynamic models and multiple robust estimation techniques, this article empirically tests the tourism-led growth hypothesis (TLGH) in the case of SSA. Further investigations on how countries' geographical locations influence the TLGH are conducted. With panel data – spanning from the year 2000 through 2016 – on 40 SSA countries, which were regrouped into coastal, landlocked and islands, the study establishes evidence in support of the TLGH for the full sample. After geographical classifications, tourism's impact on economic growth is, however, observed to be significantly positive for only landlocked and coastal countries. Surprisingly, the impact of tourism on economic growth is significantly negative for islands within the subregion. The findings hold policy implications for the pursuit of tourism-led growth in the SSA region. [ABSTRACT FROM AUTHOR]

This study examines the impact of financial inclusion on economic growth using panel data of 22 sub-Sahara African (SSA) countries during the period spanning from 2012 to 2018. The study employs the system Generalized Method of Moments (GMM). Using a composite index of financial inclusion as well as individual financial inclusion indicators, we discovered that the availability dimension of financial inclusion, penetration dimension of financial inclusion and composite financial inclusion (all indicators put together) significantly and positively impact economic growth while the usage dimension of financial inclusion improves economic growth but not significantly. Also, bank branches and ATMs have positive and significant impact on economic growth, deposit accounts and outstanding loans promote economic growth but not significantly while outstanding deposits adversely affects economic growth. In addition, findings for mobile money indicators from 2012 to 2018 revealed that mobile money agents weaken economic growth while mobile money accounts and mobile money transactions foster economic growth but not significantly. This implies that financial education policies which help Africans better understand the potential benefits of the usage of banking services should be pursued. [ABSTRACT FROM AUTHOR]

This study examines the role of institutional quality (financial and non-financial) on the impact of workers' remittances on growth in SSA. The study also tests hierarchy of institutions hypothesis based on the arguments that different institutions exert different impact on growth. Based on macro-economic impact of remittances on economic growth in 33 SSA countries from 1996 to 2018, this study employs panel data regression analysis based on system GMM. The study finds that remittances have negative impact on growth. The study finds positive effect on financial development with strong evidence of a positive interaction between remittances and financial depth. Non-financial institutional factor as a whole has positive and significant impact on growth. Economic-institutions channel to growth is positive and significant but political-institution channel is only positive. The study, therefore, concludes that financial and non-financial institutions matter and matter a lot for remittance to impact on growth. Remittances can only have positive impact on economic growth in an environment with sound financial and non-financial institutional framework. Again, economic institutional channel is proximately related to growth, political institutional channel is deeply related, hence supports hierarchy of institution hypothesis. [ABSTRACT FROM AUTHOR]

This study used a threshold regression model to examine the existence of real sector threshold effects in the relationship between financial development and economic development in 38 sub-Saharan African countries from the period 1986–2015. The study identified threshold values of 31.1860, 33.8982% and 1.2241% for industrial value-added, agricultural value-added and total factor productivity respectively in sub-Saharan Africa. The study found that only when the real sector is proxied by industrial value-added that financial development has a significant impact on economic growth. The conclusion drawn from this empirical study is that financial development will only have a positive and significant impact on economic development when the growth in the real sector accompanies the growth in the financial sector. This study, therefore, recommended that the government of sub-Saharan African countries should ensure that the real sector is not below the threshold value so that financial development can bring development to the economy. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to examine the impact of interest rate liberalization on economic growth and the relevance of corruption in the five selected sub-Saharan African countries. Design/methodology/approach: The study used the modified version of Driscoll and Kraay's model by Hoechle, which solved the effects of cross-sectional dependence and heteroscedasticity. Findings: The findings reveal a positive impact of the index on economic growth, and it was found that foreign direct investment (FDI) and credit to private sector by banks (CPSB) all stimulate economic growth. The interaction terms of corruption with FDI and CPSB indicate negative effects that show how corruption erodes the benefits of liberalization. Finally, the paper recommends the pursuit of appropriate policies with the sole aim of eradicating corruption and providing a conducive environment for business. Originality/value: The paper developed a composite domestic financial liberalization index to capture the timing and essential dimensions of the reform process. The study investigates the effect of interest rate liberalization on economic growth and the relevance of corruption. Most of the recent and past studies only examined the impact of interest rate reforms on growth without investigating the relevance of corruption. [ABSTRACT FROM AUTHOR]

This paper utilizes structural equation modelling to analyse the regional impacts of disaster on economic growth. The analysis is conducted at the global level, and repeated for the nations that constitute Europe, Asia, Sub-Saharan Africa, and the Caribbean and Central America. The findings support a relationship between disasters and variations in economic growth. The output of the analysis suggests that disasters account for eleven percent of the variations in GDP globally. When assessed individually, Europe and the Caribbean and Central America have adjusted R2 of 0.243 and 0.244, while Asia and Sub-Saharan Africa had impacts of 0.09 and 0.10, respectively. [ABSTRACT FROM AUTHOR]

This paper investigates the question of aid's effects on economic growth in Sub-Saharan Africa (SSA) by disaggregating aid into grants and loans during 1994–2015. The estimation results indicate that grants have a positive and statistically significant effect on economic growth, while loans have a negative but insignificant effect on it. When we break down the panel data into Low Income Countries (LICs) and Middle Income Countries (MICs) in order to gain further insight, grants have been effective in spurring growth in both LICs and MICs, while loans have had positive and significant impact on economic growth in neither LICs nor MICs. Accordingly, the main findings of this study provide a consistent evidence in support of the grants-effectiveness on growth in both MICs and LICs, contrary to the ineffectiveness of loans. The other supplementary results show that the domestic investment (GCF) and education (SEC) which are basically public policy variables have significantly positive impacts on economic growth in MICs, while they are not statistically significant in LICs. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this study is to analyze the mediating effect of human capital in foreign direct investment (FDI) and growth nexus and establish the threshold of human capital in 28 sub-Saharan African (SSA) countries over the period 1999–2017. Design/methodology/approach: This study used a secondary source of data obtained from the World Development Indicator and used the system generalized method of moments and dynamic panel threshold regression (TR) to analyze the data. Findings: This study found that FDI and human capital have no significant impact on the economic growth in SSA. However, when the interactive term of FDI and human capital was introduced in the model, the economic growth effect of FDI became positive and significant, while the coefficient of the interactive term is negative and significant. This presupposes that SSA does not have a sufficient high-quality workforce that can absorb and transform the spillover benefits of FDI into economic growth. As a result, this study applied the TR to determine the minimum level of human capital and established a threshold level at 63.91%. Practical implications: It, therefore, becomes pertinent for policymakers in the SSA region to have a human capital policy to build up their absorptive capacities to fully take advantage of FDI. Originality/value: The contribution of this study lies in establishing a threshold of human capital at 63.91% for countries in the SSA region. [ABSTRACT FROM AUTHOR]

This paper investigated the role of capital flows in shaping the relationship among financial development, human capital and economic growth in selected sub-Saharan African (SSA) countries. This study examined two different forms of capital flows; portfolio equity and foreign direct investment, and their influences on the linkages of financial development, human capital, and growth. We deployed data on eleven SSA countries covering the period between 1999 and 2014 using difference generalized method of moments. Human capital has a direct positive impact on growth only when measured in terms of its efficiency, irrespective of the measures of financial development and capital flows. We obtained mixed results on introducing capital flows irrespective of the choice of financial development and human capital measures; positive and negative impacts almost equally dominated the results albeit largely statistically insignificant and negligible coefficients. Overall, capital flows, especially, foreign direct investment dampens growth through the financial development and human capital. [ABSTRACT FROM AUTHOR]