Economic complexity to boost the selected sub-Saharan African economies

Abstract

Orientation: Economic complexity is a measure of productive capabilities indirectly by looking at the mix of sophisticated products that countries export. The economic complexity index proposed a proxy for diversity and ubiquity of products in the export basket.Research purpose: This study seeks to determine if economic complexity can influence the inequality measured by the Gini index in some selected sub-Saharan African countries.Motivation for the study: The need for the study emanates from the notion that that economic complexity can reduce income inequality hence it is imperative to investigate this relationship in the sub-Saharan African region where most countries produce few sophisticated goods that are also labour-intensive. Inadequate literature within the African continent has also contributed to the formulation of this study.Research approach/design and method: This study employed the autoregressive distribution lag (ARDL) model to analyze a panel data set, which includes eight sub-Saharan African countries for the period 1994–2017.Main findings: We found that economic complexity can reduce income disparities.Practical/managerial implications: Sub-Saharan African countries should shift their productive capabilities and resources from primary to sophisticated products in the manufacturing and services sector to increase economic complexity and reduce inequality.Contribution/value-add: The study makes an important contribution to the debate about the relationship between economic complexity and income inequality in the sub-Saharan African context and it is envisaged that it will inform the actions of the decision-makers to drive future productivity and prosperity in the region.

Economic complexity and entrepreneurship: insights from Africa

“…The concept is based on the main idea that economies which accumulate more productive knowledge capabilities will produce diverse and sophisticated products. Considering the theoretical and empirical analyses discussed above, this study proposes two testable hypotheses Ncanywa et al (2021). explain that a speedy economic expansion in association with economic complexity should focus on the export sophistication of African nations(Bhorat et al, 2016;Songwe, 2019).…”

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

“…Recent studies in the literature (e.g. 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).…”