Long-Run and Short-Run Effects of Trade Openness on Life Quality in Sub-Saharan Africa

This paper contributes to the understanding of the other neglected effects of trade openness by analysing how it affects life quality in sub-Saharan African countries over the period 2000–2016. We used two trade openness indicators, namely: Squalli and Wilson index and the rate of trade. The empirical evidence is based on a pooled mean group approach. With two panels differentiated by their colonial origin, the following findings are established: the trade openness variable measured by Squalli and Wilson index has no effect on life quality in the both groups of countries in the short-run. However, it has a positive and significant effect on life quality in the both group of countries in the long-run. The use of the rate of trade confirms the results in the both groups of countries in the long-run. The contribution of trade openness to life quality is 3.27 and 5.19 times higher in the Former British Colonies than that recorded in the Former French Colonies of SSA respectively to the use of Squalli and Wilson index and the rate of trade. Overall, we find strong evidence supporting the view that trade openness promotes life quality in SSA countries in the long run.

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Implications of Governance, Natural Resources, and Security Threats on Economic Development: Evidence from Sub-Saharan Africa

International Journal of Environmental Research and Public Health ◽

10.3390/ijerph18126236 ◽

2021 ◽

Vol 18 (12) ◽

pp. 6236

Author(s):

Husam Rjoub ◽

Chuka Uzoma Ifediora ◽

Jamiu Adetola Odugbesan ◽

Benneth Chiemelie Iloka ◽

João Xavier Rita ◽

...

Keyword(s):

Economic Development ◽

Natural Resources ◽

Causal Effect ◽

Sub Saharan Africa ◽

Security Threats ◽

African Countries ◽

Significance Level ◽

Long Run ◽

Short Run ◽

Sub Saharan

Sub-Saharan African countries are known to be bedeviled with some challenges hindering the economic development. Meanwhile, some of these issues have not been exhaustively investigated in the context of the region. Thus, this study aimed at investigating the implications of government effectiveness, availability of natural resources, and security threats on the regions’ economic development. Yearly data, spanning from 2007 to 2020, was converted from low frequency (yearly) to high frequency (quarterly) and utilized. Data analysis was conducted using Dynamic heterogeneous panel level estimators (PMG and CS-ARDL). Findings show that while PMG estimator confirms a long-run causal effect of governance, natural resources, and security threats on economic development, only natural resources show a short-run causal effect with economic development, while the CS-ARDL (model 2) confirms the significance of all the variables both in the long and short-run. Moreover, the ECT coefficients for both models were found to be statistically significant at less than 1% significance level, which indicates that the systems return back to equilibrium in case of a shock that causes disequilibrium, and in addition, reveals a stable long-run cointegration among the variables in the model. Finally, this study suggests that the policy makers in SSA countries should place more emphasis on improving governance, managing security challenges, and effectively utilizing rents from the natural resources, as all these have severe implications for the economic development of the region if not addressed.

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Population Growth and Urbanization in Africa

Population Growth and Rapid Urbanization in the Developing World - Advances in Electronic Government, Digital Divide, and Regional Development ◽

10.4018/978-1-5225-0187-9.ch014 ◽

2016 ◽

pp. 282-297 ◽

Cited By ~ 2

Author(s):

Samuel Adams ◽

Eric Evans Osei Opoku

Keyword(s):

Carbon Dioxide ◽

Population Growth ◽

Carbon Dioxide Emissions ◽

Age Groups ◽

African Countries ◽

Pooled Mean Group ◽

Long Run ◽

Negative Effect ◽

Short Run ◽

Sub Saharan

This study examined the effect of population growth and urbanization on the environment (carbon dioxide emissions) for 37 sub Saharan African countries based on 1980-2010 annual data. Using the Pooled Mean Group estimation technique, the findings of the study show that affluence and industrialization have negative effect on the environment (increases carbon dioxide emissions) while urbanization does not have a significant effect on carbon dioxide emissions. The population variable is significant only in the long run but insignificant in the short run. Also, after controlling for the different age groups, the results show that the more active age group (15-59) is positive and significantly related to carbon dioxide emissions.

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Deconstructing the Impact of Entrepreneurship on Income Inequality in Sub-Saharan Africa Countries

Economics and Business ◽

10.2478/eb-2020-0018 ◽

2020 ◽

Vol 34 (1) ◽

pp. 273-284

Author(s):

Jimoh S. Ogede

Keyword(s):

Income Inequality ◽

Sub Saharan Africa ◽

African Countries ◽

Macroeconomic Factors ◽

Significance Level ◽

Long Run ◽

Short Run ◽

Sub Saharan ◽

Entrepreneurial Activities ◽

The Impact

Abstract The study examines the impacts of entrepreneurship on income inequality in a panel of 29 Sub-Saharan African countries spanning from 2004 to 2020. The paper employs a dynamic heterogeneous panel approach to differentiate between long-run and short-run impacts of entrepreneurship on income inequality. The findings establish a robust and direct nexus between entrepreneurial activities and income disparity. The results of the two entrepreneurial indicators are stable. Besides, the coefficient of the human capital is positive in the regression and statistically significant at a 5 percent significance level. The proxies for macroeconomic factors exhibit diverse signs and impact, which suggest a policy stimulus aimed at refining macroeconomic situations and also ignite prospects for households to increase their incomes.

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The Dynamic Impact of Public External Debt on Capital Formation in Sub-Saharan Africa: The Pooled Mean Group Approach

Journal of Contemporary Research in Business, Economics and Finance ◽

10.33094/26410265.2021.34.144.157 ◽

2021 ◽

Vol 3 (4) ◽

pp. 144-157

Author(s):

Chukwunenye N Kocha ◽

Marshal Iwedi ◽

James Sarakiri

Keyword(s):

External Debt ◽

Capital Formation ◽

Debt Service ◽

Sub Saharan Africa ◽

Interest Payment ◽

Debt Sustainability ◽

Pooled Mean Group ◽

Long Run ◽

Short Run ◽

Sub Saharan

The increasing reliance on public external debt stocks in Africa and other developing countries has raised the question of debt sustainability, especially in the face of Covid-19, which has forced many counties (both developed and developing) into an unforeseen and unplanned recession. This study contributes to the literature on debt sustainability by examining the effect of public debt on capital formation in Sub-Saharan Africa (SSA) from 2000 to 2008 using the pooled mean group estimation approach. The debt variables considered are external debt stock, debt service on external debt, and interest payment on external debt. Consistent with the overhang theory, our results show that increasing external debt stock and interest payment on external debts only have a marginal impact on capital formation in the short run and exerts a serious negative effect in the long run. Our results also show that debt service burden has a positive effect on gross fixed capital formation in the long run. Therefore, we argue that despite being faced with a huge debt service burden resulting from large external debt stock, SSA countries are not neglecting investments in critical infrastructures needed to drive economic growth. However, we recommend that increasing government revenue base, minimizing economic waste associated with public expenditure, and intensifying negotiations for debt relief may be a plausible way out.

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Does Globalisation Promote Economic Output in Sub-Saharan Africa? Evidence from Bootstrap ARDL Model

Journal of Asian and African Studies ◽

10.1177/0021909621990855 ◽

2021 ◽

pp. 002190962199085

Author(s):

Huiping Dong ◽

Yifei Cai ◽

Xing Shi

Keyword(s):

Sub Saharan Africa ◽

African Countries ◽

Economic Output ◽

Distributed Lag ◽

Distributed Lag Model ◽

Autoregressive Distributed Lag ◽

Long Run ◽

Short Run ◽

Lag Model ◽

Sub Saharan

This study aims to investigate whether globalisation promotes economic output in Sub-Saharan African countries in both the short run and the long run. Based on the latest version of the KOF globalisation index, we employ a newly developed bootstrap autoregressive distributed lag model to analyse this question. Compared to the traditional autoregressive distributed lag model, which ignores the degenerate cases, the new approach could avoid spurious cointegration. Results show that globalisation and economic output are positively correlated for most Sub-Saharan African countries, while the causal effect cannot be concluded except for a couple of exceptions. This finding implies that globalisation cannot guarantee an increase in economic output in the long run for most Sub-Saharan African countries. The Granger causality test shows that globalisation leads to economic output for Burundi, Gabon, Rwanda, Senegal and Zambia in the short run. Conversely, economic output leads to globalisation for Burkina Faso, Cameroon, Ghana, Kenya and Senegal. For Senegal, globalisation and economic output mutually determine each other and therefore form a positive spiral development path. Policymakers should be aware of the specific features of different economies in making sound globalisation policies to avoid the underlying adverse effects of global integration.

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Budget Deficit and Economic Growth in Sub-Saharan Africa: A PMG Approach

Asian Journal of Economics Business and Accounting ◽

10.9734/ajeba/2019/v13i330174 ◽

2020 ◽

pp. 1-10

Author(s):

Gbenga Oladapo Awolaja ◽

Ikponmwosa Osagie Esefo

Keyword(s):

Economic Growth ◽

Significant Relationship ◽

Budget Deficit ◽

Estimation Method ◽

Sub Saharan Africa ◽

Policy Makers ◽

Pooled Mean Group ◽

Long Run ◽

Short Run ◽

Sub Saharan

The relationship between budget deficit and economic growth remains one of the widely debated topics among policy makers and economists in both developed and developing countries of the world. This paper empirically investigated the long run and short run relationship between budget deficit and economic growth in sub-Saharan Africa countries from 1991 to 2018 using Panel data for twenty (20) sub-Saharan Africa Countries. The estimation technique employed in the study was the Pooled Mean Group (PMG) estimation method and the regression results revealed that in the long run, budget deficit has a negative and significant relationship with economic growth whereas in the short run, it has a positive and significant relationship with economic growth. The study concluded that government should reduce the overall recurrent expenditure as it will help to mitigate the problem of budget deficit that leads to debt accumulation in sub-Saharan Africa countries and increase expenditure on developmental projects.

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Critical Analysis of Governance, Economic Freedom, and Human Capital Implications on Sustainable Economic Growth: Evidence from Sub-Saharan Africa

International Journal of Social Science and Economics Invention ◽

10.23958/ijssei/vol07-i08/312 ◽

2021 ◽

Vol 7 (08) ◽

Author(s):

Yusuf Ayotunde Ayodeji

Keyword(s):

Economic Growth ◽

Human Capital ◽

Causal Relationship ◽

Economic Freedom ◽

Sub Saharan Africa ◽

Pooled Mean Group ◽

Long Run ◽

Short Run ◽

Sub Saharan ◽

Sustainable Economic Growth

In the recent time, the attention of scholars have shifted towards deeper understanding of factors that drives the achievement of sustainable economic growth, but yet factors such as governance, economic freedom, and human capital have not been exhaustively investigated, especially within the context of Sub-Saharan Africa (SSA). Thus, this study investigates the implications of governance, economic freedom, and human capital on the sustainability of economic growth in the SSA, usingpanel data that spanned between 1996 and 2018, and employed a Pooled Mean Group (PMG) estimator for the analysis. This study found governance, economic, and human capital to have a positive and significant causal relationship with economic growth in the long-run, while only economic freedom was found to have a negative and significant causal relationship with economic growth in the short-run. In addition, this study found that in case of disequilibrium, the model has a convergent speed of adjustment of about 10.8%. The study implications were discussed in the study.

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The Role of FDI on Structural Transformation among Sub-Saharan African and EAP Countries Using a Panel Data Approach

Journal of University of Shanghai for Science and Technology ◽

10.51201/jusst/21/11923 ◽

2021 ◽

Vol 23 (11) ◽

pp. 402-428

Author(s):

Solomon Kebede Menza ◽

◽

Zerihun Getachew ◽

Berhanu Kuma ◽

Tora Abebe ◽

...

Keyword(s):

Panel Data ◽

Structural Transformation ◽

Descriptive Analysis ◽

African Countries ◽

Fdi Inflows ◽

Income Category ◽

Pooled Mean Group ◽

Long Run ◽

Short Run ◽

Sub Saharan

In recent decades the activities of multinational corporations have increased across the globe substantially having a massive flows of foreign direct investment. This paper empirically examines the role of FDI on structural transformation among Sub-Saharan African and EAP Countries Using a Panel Data Approach. To achieve the objective the study took 31 years panel data . The study used descriptive analysis and empirical methods of analysis. The panel Autoregressive Distributed Lag model with error correction models of Pooled Mean Group technique were employed after checking the possible assumptions of our economic series. The results of Im-Pesaran-Shin test confirms our economic series are stationary at level and first difference forms. Pedroni’s cointegration tests suggests the existence of co-integration between the variables. According to the descriptive analysis, on average structural transformation index (STI) is the highest for China (30.52%) followed by South Korea (25.86), while Ethiopia (4.85) is having the lowest. On other hand, the East Asian and Pacific (EAP) countries in the higher income category are performing better than Sub-Saharan African countries. In addition,Sub-Saharan Africa countries are by far having low level of FDI inflows as compared to EAP countries. Particularly, the FDI inflows for EAP countries in the higher income category is around USD 52 Billion, and while for low and middle income category SSA countries it accounts around USD 2.2 Billion and USD 85 million, respectively. More specifically, across countries in the panel the FDI inflow is the highest for China while on average Kenya is having the lowest FDI inflows. On the other hand, according to the ARDL model of Pooled Mean Group estimation technique in the long-run financial development indicator and FDI have positive impact on the structural transformation index of nations at 1percent level of significance for the full sample in the panel. Moreover, pooled mean group regression result among the Sub-Saharan African and EAP countries FDI has a significant but having different sign for the two group in predicting structural transformation. Particularly, for EAP countries FDI has a negative effect in the long run and a positive effect in the short-run on structural transformation index which are also statistically significant. While for Sub-Saharan African countries FDI has a positive and statistically significant effect on structural transformation both in the long run and short-run. Finally, the government of developing countries like SSAs should provide different incentive packages to attract FDI inflows, among others.

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Population Growth and Urbanization in Africa

Socio-Economic Development ◽

10.4018/978-1-5225-7311-1.ch069 ◽

2019 ◽

pp. 1355-1370

Author(s):

Samuel Adams ◽

Eric Evans Osei Opoku

Keyword(s):

Carbon Dioxide ◽

Population Growth ◽

Carbon Dioxide Emissions ◽

Age Groups ◽

African Countries ◽

Pooled Mean Group ◽

Long Run ◽

Negative Effect ◽

Short Run ◽

Sub Saharan

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THE ROLE OF FINANCIAL DEVELOPMENT AND INSTITUTIONAL QUALITY ON ENVIRONMENTAL SUSTAINABILITY IN SUB-SAHARAN AFRICAN COUNTRIES

International Journal of Research -GRANTHAALAYAH ◽

10.29121/granthaalayah.v6.i9.2018.1218 ◽

2018 ◽

Vol 6 (9) ◽

pp. 156-177

Author(s):

Aliyu Alhaji Jibrilla

Keyword(s):

Financial Development ◽

Environmental Sustainability ◽

Carbon Dioxide Emissions ◽

Early Stage ◽

Institutional Quality ◽

Environmental Conservation ◽

Sub Saharan Africa ◽

African Countries ◽

Pooled Mean Group ◽

Sub Saharan

This study addresses the question of financial development and institutional quality influence on the environmental sustainability of some 13 countries from the sub-Saharan Africa. Relying upon pooled mean group (PMG) for panel data, we provide evidence which suggest that both financial development and institutional quality are statistically significant determinants of per capita carbon dioxide emissions in the region. More specifically, we found that without healthy institutions and sound financial system sub-Saharan African countries might not avoid environmental degradation experienced by advanced nations during their early stage of economic progress. Our results also support the EKC hypothesis in the region. In addition, the paper also shows that more openness to FDI inflows is good for the environment across the SSA. These findings suggest the need for institutional and financial service reform that supports robust environmental conservation.

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