Infrastructure development and industrial sector productivity in Sub-Saharan Africa

Azolibe, Chukwuebuka Bernard; Okonkwo, Jisike Jude

doi:10.1108/jed-11-2019-0062

Cited by 42 publications

(32 citation statements)

References 38 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Finally, financial development is positive and significant in both DOLS and FMOLS models showing the effectiveness of the financial sector in mobilizing funds from the surplus sectors and channeling it to the manufacturing sector, and it supports the findings of Azolibe and Okonkwo (2020); Ogar et al (2014) and Elijah (2018). But excluding high-income countries, it is insignificant in influencing manufacturing sector growth.…”

Section: Analysis and Discussion Of Resultssupporting

confidence: 78%

See 1 more Smart Citation

Does foreign direct investment influence manufacturing sector growth in Middle East and North African region?

Azolibe

2020

ITPD

Self Cite

View full text Add to dashboard Cite

PurposeThis study empirically assessed the influence of foreign direct investment on the manufacturing sector growth in the Middle East and North African region using panel data of 18 countries covering the period of 1975–2017.Design/methodology/approachThe study employed Levin et al. (2002) test (LLC) and Im et al. (2003) panel unit root test. Furthermore, Kao’s cointegration test was applied to examine the long-run relationship between the variables. Both the Dynamic OLS and Fully modified OLS were used in estimating the short-run relationship.FindingsThe results of the DOLS and FMOLS indicate that both inward and outward FDI influence the manufacturing sector growth positively. This shows that much of the manufacturing sector growth in the MENA region is driven by both inward and outward FDI. Our findings made a strong new proposition that aside from the negative influence proposed by Stevens and Lipsey (1992), outward FDI could also have a positive influence on the manufacturing sector of a country through effective utilization of domestic raw materials that are produced locally for production of goods in a foreign country.Practical implicationsMENA countries should concentrate more on making policies that will encourage the effective utilization of domestic resources for outward foreign direct investment in other countries of the world as it has the capacity to boost the manufacturing sector growth. Also, policies that will attract more inflows of FDI in the region should be encouraged. Both inward and outward FDI should be considered as an integral part of MENA economic policy in order to spur the manufacturing sector growth.Originality/valuePrevious empirical studies on the relationship between FDI and manufacturing sector growth have focused much on the influence of inward FDI. Thus, very little attention has been paid to the contribution that the outward FDI makes to the growth of the manufacturing sector of the host country. Our empirical study focused on the influence of both inward and outward FDI on the manufacturing sector growth with specific emphasis on the MENA region that remains the center of attraction of inward FDI and a source of inward FDI to most nonoil producing developing and developed countries given the oil-rich nature of the region.

show abstract

Section: Analysis and Discussion Of Resultssupporting

confidence: 78%

“…Financial development is expected to have a positive relationship with the manufacturing sector growth. The studies of Azolibe and Okonkwo (2020); Ogar et al (2014), and Elijah (2018) confirmed a positive relationship between domestic credit to the private sector and the manufacturing sector growth.…”

Section: Data Sources and Definition Of The Variablesmentioning

confidence: 94%

Does foreign direct investment influence manufacturing sector growth in Middle East and North African region?

Azolibe

2020

ITPD

Self Cite

View full text Add to dashboard Cite

show abstract

“…Regarding the measurement of infrastructure quality, we follow Kodongo and Ojah (2016), Azolibe and Okonkwo (2020) and approximate it by the African Infrastructure Development Index (AIDI) of the African Development Bank. Available for all 54 African countries over the period 2000-2018, the AIDI is a composite index which monitors the status and progress of infrastructure development across the African continent.…”

Section: Data and Measurementsmentioning

confidence: 99%

Infrastructure Development as a Prerequisite for Structural Change in Africa

Kuete

Asongu

2022

J Knowl Econ

View full text Add to dashboard Cite

Structural change is seen by development economics theorists as a driver of sustained and sustainable economic growth. African countries that have understood this prioritize structural change policies in their national development programs in order to reduce poverty and promote employment through commodity-based industrialization. How does infrastructure development contribute to this process? The purpose of this paper is to answer this question by examining empirically whether the state of infrastructure development in Africa stimulates structural change, understood as the development of the manufacturing sector. After outlining the state of infrastructure quality in the region, and discussing some theoretical channels through which this relationship might pass, we estimate fixed effects models from 52 African countries over the period 2003-2018. Results which are robust to controlling for institutional dynamics and the natural resource curse hypothesis suggest that structural change in Africa is optimized with the development of infrastructure, particularly energy and information and communication technologies. Among other policy implications arising from these findings, the establishment of partnership projects with other developed countries in terms of superstructure for enhanced industrialization is recommended.

show abstract

“…For example, despite the improvements in electricity access improved from 31% in 2003 to 36.5%, 50% and 51% in 2008, 2013 and 2018, respectively, scholars note with concern the poor quality electricity supply, and an uneven progress in the sub-regions of SSA. Statistics show that whereas only eight countries (Gabon, Mauritius, Reunion, Seychelles, Swaziland, South Africa, Cape Verde and Ghana) had an access rate above 80 per cent in 2016, the majority of countries had a rate below 50 per cent with some operating at a rate below 25 per cent, frequent power outages that on average happen every after four days notwithstanding (Azolibe & Okonkwo, 2020 ; Scott, 2015 ). It should be recalled that though Africa is home to almost a fifth of the world's population, it accounts for less than 4% of global electricity use, with the majority usage recorded in North Africa, leaving more than half of SSA population (about 600 million) in dark (The Economist, 2019 ).…”

Section: Introductionmentioning

confidence: 99%

“…Among the exceptions is Azolibe and Okonkwo ( 2020 ) who however focus on a smaller panel of 17 countries of SSA to examine the direct role of infrastructure on the industrial sector productivity. Our interest is the manufacturing sector, as we test several hypotheses on a much larger sample of 30 countries, besides taking into account cross-sectional dependence that has been ignored in the latter study, despite being part and parcel of a panel data characteristic especially among countries that likely experience common shocks say, from deeper integration efforts among them.…”

Section: Introductionmentioning

confidence: 99%

The manufacturing output effects of infrastructure development, liberalization and governance: evidence from Sub-Saharan Africa

et al. 2022

View full text Add to dashboard Cite

The study draws inference on the effects of infrastructure development, liberalization, and governance on manufacturing production (MVA) in Sub-Saharan Africa. In order to determine the longrun implications of these factors, and for purposes of retaining estimates efficiency and consistency in the presence of complex errors, we employed the Panel-Corrected-Standard-Error estimator on panel data spanning 2003–2018 for 30 SSA countries. The main result of this in-depth analysis shows that infrastructure development as well as governance are key to manufacturing production. While infrastructure development affects MVA positively in the longrun, an improvement in the financial openness facilitates this linkage but only between transport infrastructure on the one hand, and electricity infrastructure on the other, whereas the converse appears the case when trade liberalization is the moderating variable. Overall, regardless of the type of liberalization, manufacturing output is always higher with better institutional quality. Our findings hold after controlling to additional covariates and are robust to alternative estimation measures. Among the other important policy derivatives of our findings, we emphasize that efforts aimed at reversing Africa’s pervasive infrastructure deficit, in ways that enhance manufacturing share in GDP, must be carefully nuanced under the avoidance of the incautious liberalization policies. We render support to the regional efforts to improve infrastructure, substantially curb poor governance while vigorously promoting the rule of law, regulatory quality, government effectiveness, voice and accountability. Supplementary Information The online version contains supplementary material available at 10.1007/s40812-022-00216-2.

show abstract

Infrastructure development and industrial sector productivity in Sub-Saharan Africa

Cited by 42 publications

References 38 publications

Does foreign direct investment influence manufacturing sector growth in Middle East and North African region?

Does foreign direct investment influence manufacturing sector growth in Middle East and North African region?

Infrastructure Development as a Prerequisite for Structural Change in Africa

The manufacturing output effects of infrastructure development, liberalization and governance: evidence from Sub-Saharan Africa

Contact Info

Product

Resources

About