Does infrastructural development foster export upgrading in Africa?

Abstract

A growing body of literature highlights the importance of export sophistication for economic development. Given the newness of the literature on export sophistication, its determinants are under‐exploited. As a pioneer study, this paper attempts to fill this gap in the literature by examining the effect of infrastructure development on export sophistication. Based on a panel of 45 African countries over the period 2003–2016, the results of the different estimations show that infrastructure, including transport, electricity, ICT and access to water and sanitation, improves export sophistication in Africa. Our results also show that the effect of infrastructure varies at different intervals of the export sophistication distribution. Therefore, improved infrastructure would allow African countries to not only improve their export structure but also achieve sustainable and durable growth.

Effects of Trade Openness and International Financial Inflows on Africa's Productive Capacity: A Study of the Moderating Role of Governance Institutions

“…However, by employing the system generalized method of moments (GMM) estimation technique, this study tackles the issue of endogeneity of the regressors. Following studies such as Kamguia et al (2022) and Kamguia et al (2023) all the independent variables are treated as endogenous variables. Furthermore, we utilize one lag o f the right-hand side variables, i.e., the independent variables as instrumental variables following some studies in the literature (e.g., Kamguia et al, 2022;Ekeocha et al, 2021Ekeocha et al, , 2022Ogbonna et al, 2021Ogbonna et al, , 2022.…”

Effects of terrorism and economic policy uncertainty on economic complexity in Africa: A study of the moderating role of governance institutions

“…In this study, preference is given to the GMM approach instead of the instrumental variable two-stage least squares (2SLS) method. This is because, even though the instrumental variable approach has proven effective in resolving the problem of reverse causality (Kamguia et al, 2023), its major drawback is the challenge of finding purely exogenous external instruments. In addition, the method also tends to overlook the endogeneity of other explanatory variables.…”

“…Ahmed et al, 2022;Balland et al, 2022;Hausmann et al, 2014;Hidalgo & Hausmann, 2009;Ncanywa et al, 2021;Nguea et al, 2022;Sepehrdoust et al, 2022;Zhu & Li, 2017) have amplified the importance of economic complexity by demonstrating that sophisticated economies have more diversified exports compared to less complex economies. Other studies that have also highlighted the benefits of economic complexity at regional and national levels include Sweet and Eterovic (2019), Sepehrdoust et al (2019), Vu (2020), Shahzad et al (2021), Ajide (2022) and Kamguia et al (2023). These benefits include increased economic diversification, greater economic productivity and improved well-being through higher wages and income.…”