Core infrastructure and industrial performance in Africa: Do institutions matter?

Mesagan, Ekundayo Peter; Bello, Mustapha O.

doi:10.1007/s12232-018-0314-y

Cited by 10 publications

(8 citation statements)

References 28 publications

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“…However, the current study offers a divergence to the above studies because it examines the role of quality institutions in the FDI-Industrialisation mix as against the FDI-Economic growth mix examined in the above studies. This is as a result of the recent importance literature has accorded to African industrialisation (Opoku and Yan 2018;Mesagan and Bello 2018;Lu and Liu 2018;Asongu and Odhiambo 2019). Also, while there is a near similarity to Adeleke (2014) in the measurement of institutional quality, this study also deviates by generating its institutional quality index-as against the use of averages-using the principal component analysis (PCA) to arrive at a reduced dimension of institutional quality variables.…”

Section: Introductionmentioning

confidence: 89%

“…As suggested in Ajide and Raheem (2016), quality institutions reduce the unsystematic political risk that could hinder foreign direct investment inflow to Africa. Mesagan and Bello (2018) opined that quality institutions create an incentive for innovation and facilitate technological advancement for industrial productivity. Further, while a few studies considered the dynamic nature of industrialisation, most of these studies equally ignored the high persistence of industrialisation measurement.…”

Section: Literature Reviewmentioning

confidence: 99%

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Foreign Direct Investment, Institution and Industrialisation in Sub-Saharan Africa

Oduola

Bello

Popoola

2021

Econ Change Restruct

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Empirical studies have been conducted around the impact of foreign direct investment on industrialisation; however, while they have produced inconsistent inferences, the impact channel of this relationship has also been ignored. This study focuses on the role of institution on foreign direct investment for industrialisation in a panel of 43 Sub-Sahara African countries for the period 1996 through 2018. This study uses manufacturing value added per capita to capture industrialisation and based its empirical evidence on the pooled ordinary least squares, fixed effects and system generalised method of moments methods of estimation. From our empirical analysis, the following findings are established: First, persistence level of industrialisation determines to a large extent, the current industrialisation in sub-Saharan Africa. Second, foreign direct investment exerts a negative and significant impact on industrialisation. Last, when indicators of institution are imposed on foreign direct investment in our model, the negative impact existing between foreign direct investment and industrialisation remains apparent except for the political index of institution that moderates and averts this negative effect although the magnitude is meagre. On the policy ground, this study advocates for institutional policies and reforms that targets economic, political and institutional forms of governance.

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Section: Introductionmentioning

confidence: 89%

Section: Literature Reviewmentioning

confidence: 99%

Foreign Direct Investment, Institution and Industrialisation in Sub-Saharan Africa

Oduola

Bello

Popoola

2021

Econ Change Restruct

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“…Also, The main driver of industrialization is manufacturing, which generally needs energy efficiency and energy efficiency can attain by building energy infrastructure. As he mentioned his research by (Mesagan & Bello, 2018), one of the main barriers of Africa's industrialization is the lack of adequate energy. Therefore, to evaluate its effect on industrialization in the country, our The average value of industry value added is around 12.55 while its a minimum value of is around 6.25 and its maximum is around 22.5. moreover, the normal portion of Foreign direct investment is around 3.4 percentage of GDP and the lowest FDI that the country received is around 0.005 percentage of GDP while the highest maximum FDI that country ever received is around 5.4 percentage of GDP.…”

Section: Source: Authors' Computationmentioning

confidence: 99%

The Impact of FDI on Industrialization in Ethiopia

Liu¹,

Shamshedin²

2019

IJARBSS

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The Foreign Direct Investment has been recognized one of the main tools that can drive the host country to achieve industrialization due to multiple roles of bringing capital investment, technology, and skills, which are vital, the industrialization process.The motivation behind this study is to research the effect of Foreign Direct Investment inflow Industrialization in Ethiopia, utilizing the time series data from 1992-2017 and employing the Vector Autoregressive model (VECM). The result of the Johanson cointegration test demonstrated that there exists a longrun equilibrium relationship between the variables. Moreover, the outcome of VECM for Long-Run analysis shown that FDI has a positive impact and significant on Industrialization while the result of the short-run analysis showed that the FDI has insignificant but positive in impact on Industrialization, which means that the FDI inflows have a significant impact on Ethiopia's industrialization in the end. Similarly, the variance decomposition outcome reveals the impact FDI in the short-run is not too significant, but its impact increases in the long -run. Therefore, this study recommends that the government to give a suitable strategy and policies, which would give the first priority to attract more FDI and associate with the industrialization, process that ongoing on in the country.

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“…All these studies took panel of industries rather than panel of Indian states but lately, the international works of Isaksson (2009aIsaksson ( , 2009b, Mesagan and Bello (2018) and Luo et al (2019) divagated from the old channel of infrastructure and productivity linkage. They adopted the regression procedure and talked in terms of infrastructure-value addition of the manufacturing sector.…”

Section: Introductionmentioning

confidence: 99%

Core Infrastructure and Manufacturing Activity in the Indian States: Does the Income Group Matter?

Arora

Kaur

2022

The Indian Economic Journal

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Taking the data for 17 Indian states for the period running 1991–2017, the study investigates relationship between infrastructure and manufacturing value added at the overall as well as segregated levels to study the spatial differences. Preliminary tests of cross-section dependence point to the existence of dependence among the cross sections after which second-generation testing procedures are applied. Spatial differential impact of infrastructure on the performance of manufacturing activity is estimated using fixed/random effect modelling. The empirical results show that infrastructure index exerts positive and significant impact on the manufacturing performance with estimate of 0.20 for all states in India and 0.49 for high-income states. Similarly, individual components of infrastructure influence manufacturing activity differently. Road infrastructure is influencing manufacturing performance negatively in high-income states while it is positive for other states; teledensity exerts positive influence in case of middle-income states while the impact is negative in case of low-income states. Dumitrescu and Hurlin’s causality test shows bidirectional causality from infrastructure to manufacturing output. JEL Codes: D02, E62, H54, L94, L96

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Core infrastructure and industrial performance in Africa: Do institutions matter?

Cited by 10 publications

References 28 publications

Foreign Direct Investment, Institution and Industrialisation in Sub-Saharan Africa

Foreign Direct Investment, Institution and Industrialisation in Sub-Saharan Africa

The Impact of FDI on Industrialization in Ethiopia

Core Infrastructure and Manufacturing Activity in the Indian States: Does the Income Group Matter?

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