African growth convergence: role of institutions and macroeconomic policies

Abstract

Purpose The purpose of this study is to examine the role of institutions and policies on growth convergence in Africa. Design/methodology/approach This study uses different methods of panel modelling on a panel of 50 African Countries covering a period of 1990-2014. Findings The results confirmed the presence of conditional convergence among countries in the region. On the average, technology accumulation and fiscal policies indicators are positive function of growth, while human resources, monetary policies indicators and ineffective institutions partly necessitated by poor level of development negatively impact growth. The study concludes, though traditional growth variables and policies are imperative in achieving growth in income, they remain insufficient in an environment characterize by extractive and absolutist institutions. Therefore, institution remains the link that bridges the gap in between proper mix of resources and policies. Research limitations/implications Based on the results, policy-makers in the region should allocate certain percentage of their resources (on a sustainable basis) towards building a qualitative institution. Also, future studies on Africa should be focused on the rate at which poor level of economic development determines the quality of institutions which in turn impacts the level of growth in income. Originality/value The study contributes to the existing literature on institutional convergence with particular focus on African countries using system GMM to capture the endogeneity among the series.

Impact of Entrepreneurial Infrastructure on Profitability of Hotels in Minna, Nigeria.

“…In the last decade however, various studies have used the theory at firm level in establishing a link between exogenous factors and firm growth, for example, Li & Pang (2010:375) opined that "Exogenous growth theory emphasizes that enterprises competitive advantage roots in the external environment". The theory assumes that, the growth of a firm is influenced by factors that are external to the firm (Adegbite, 2012;Bonaiuti, 2018;Mansour, 2017;Olarinde & Yahaya, 2018).…”

Analysis of Sectoral Outcomes and Institutional Quality Nexus in Sub-Saharan Africa

“…Iyoboyi and Pedro (2014) used a vector error correction model to demonstrate that in the period 1961 to 2011, institutional quality has a negative relationship with macroeconomic performance in Nigeria. Olarinde and Yahaya (2018) used the system GMM technique to find that ineffective institutions impact negatively on growth. Oladapo et al (2021) also used the system GMM technique from 1996 to 2019 to study the effect of quality institutions on foreign direct inflows in 25 African countries drawn from five African regions.…”