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In recent decades, Chinese FDI has become an integral investment source for African countries and has, therefore, engendered studies seeking to understand the determinants of these flows. In a quest to identify the factors that stimulate these flows, this paper assesses whether the ease of starting a business induces Chinese FDI flow to Africa. The analysis is based on panel data for 46 African countries between 2004 and 2018. The results from fixed-effects estimations suggest that Chinese FDI is attracted by the ease of starting a business in African economies. This finding also holds for sub-Saharan Africa (SSA) and is robust across all estimations. The results also provide corroborating evidence that identifies Chinese FDI as market and resource-seeking, attracted to large markets and economies with abundant natural resources. The findings suggest that improving business regulations could be a stimulant for Chinese FDI flow to Africa. In evaluating the nexus between Chinese FDI and business start-ups, this paper provides new evidence to complement the dated studies on this theme. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to investigate the effect of institutional structures on the strength of auditing and financial reporting standards. Design/methodology/approach: This paper employs a panel data of 36 African countries over the period 2000–2018. System generalised method of moments (SGMM) was employed to estimate the relationship between institutional structures and the strength of auditing and financial reporting standards in Africa. Findings: The findings of this paper indicate a positive and statistically significant relationship between institutional structures and the strength of auditing and financial reporting standards. As a further analysis, the study finds that the relationship between institutional structures and the strength of auditing and financial reporting standards is stronger for economies with common-law accounting traditions than those with civil-law origin. Practical implications: The paper has important implications for countries striving to adopt and implement auditing and financial reporting standards fully. Such efforts must begin with establishing strong institutional structures in those countries. Originality/value: This study presents the first empirical panel data evidence on the effect of institutional structures on the strength of auditing and financial reporting standards in Africa. Further, the methodology employed in this study can be regarded as effective in testing the phenomenon in other regions, or it can be employed as a guiding model for future research in the area. [ABSTRACT FROM AUTHOR]

The relationship between financial development and economic growth has received much attention in developed countries in the last three decades. However, empirical study on how multidimensional levels of financial development affect the shadow economy in developing countries has received less attention. The paper's analysis begins with theoretical perspectives on the shadow economy's evolution. Using panel data from 42 African countries from 1990 to 2018, this paper addresses these research gaps by employing a battery of econometric techniques such as pooled ordinary least squares (OLS), fixed effects (FE), and system generalized method of moments (S-GMM). The results indicate that financial development is associated with a smaller size of shadow economy in Africa. On multidimensional levels, financial institutions (depth, access, and efficiency) have a negative and statistically significant impact on the shadow economy. Although financial markets are positively associated to the shadow economy, the greater impact of this is driven by financial depth and access. The findings suggest that African countries undertake credit market reforms to address financial market imperfections. [ABSTRACT FROM AUTHOR]

Infrastructure assets are vital for economic development and integration, but they also encompass political risks. In Africa, infrastructure assets have remained a paradox where there is great potential for opportunities but very few projects get to the final phases. Adequate infrastructure can propagate the attainment of the Sustainable Development Goals whilst supporting recovery from the Covid-19 pandemic. Drawing from a longitudinal data set from 2000 to 2021 for 35 African countries, the paper empirically examined the nexus between infrastructure and political risk. Several techniques were employed to determine the dynamic effect, cointegration and causality between infrastructure and political risk. Controlling for the potential endogeneity in infrastructure the system Generalized Method of Moments, the relationship between political risk and infrastructure was ascertained. Furthermore, the ARDL-PMG was employed to determine the cointegration and causal relationship between infrastructure and political risk. The results suggest a cointegration between infrastructure assets and political risk. Infrastructure adjusts to changes in political risk to its long-run equilibrium at a speed of adjustment of 16.9 per cent. Bridging infrastructure gaps in Africa requires an extensive set of actions. Thus, the policy derivatives of our findings, suggest controlling the proliferation of political risk to support infrastructure investment. [ABSTRACT FROM AUTHOR]

This paper empirically examines whether Africa's low corruption agenda can be achieved amid election cycles. We employ country-level data from 36 African countries covering the period 1998–2020. Using fixed effects, random effects and dynamic panel data regressions, our results suggest that in election years, increment in government expenditure is associated with higher corruption perception while increment in real GDP growth lowers corruption perception than in non-election years. On regional differences, the effect of election cycles on corruption perception was found to be greater in southern part of Africa than the rest of the sub-regions. These findings may have important implications for policy. [ABSTRACT FROM AUTHOR]

The paper hypothesizes that the quality of institutions tends to evolve slowly and in a piecemeal nature over time. In this process policy is seen to be a mechanism through which this evolutionary process takes place. Policy influences intermediary variables, which in turn create opportunities for institutional innovation. There are two hypotheses derived from this analysis and tested empirically in the paper. It is hypothesized that improvements in institutional quality lead to increases in economic development (using two different measures). It is also hypothesized that changes in intermediary variables resulting from policy changes lead to improvements in institutional quality. These two hypotheses are tested using a panel data set made up of twenty-five countries in Africa. The results indicate that improvements in the quality of governance institutions do lead to improvements in economic development and that policies aimed at influencing intermediary variables lead to improvements in governance institutional quality. [ABSTRACT FROM AUTHOR]

Southern Africa has fewer innovative entrepreneurs per capita than other regions of Africa and a high failure rate amongst SMEs. Common problems such as corruption, crime and poverty plague the region, and as a result many of the economies do not perform well. The purpose of this paper is to investigate what barriers hinder the development of innovative entrepreneurship and economic performance in the region, based on entrepreneurial ecosystem theory. Panel data at national level was collected for eight countries in the region. Using SEM-PLS estimation, it was found that poor national strategies, corruption, excessive taxes, and high entry barriers put innovative entrepreneurship out of reach for many people. Government policies and the socio-cultural elements encourage entrepreneurship; however, the support is not enough to contribute positively towards economic growth. Unhealthy entrepreneurial ecosystems block access to resources and opportunities, limiting entrepreneurial activity and economic output. These findings highlight problem areas that can be used as the basis for policy formulation and restructuring efforts to target the most crucial barriers to innovative entrepreneurship, thereby encouraging entrepreneurial development. This study contributes towards the understanding of entrepreneurial ecosystem dynamics in the novel and unique context of middle- and low-income countries and can inform appropriate policy restructuring to ameliorate entrepreneurship in the region. [ABSTRACT FROM AUTHOR]

This paper analyzes factors that drive foreign direct investment (FDI) in Africa. To do so, for the first time in the literature, the paper uses 5-year panel data and the system-GMM technique over the period 1970-2009. The main results are as follows: (a) larger countries attract more FDI; (b) regardless of their size, however, more open countries, politically stable countries, and countries offering higher return to investment also attract FDI; (c) FDI inflows are persistent in Africa. This suggests that countries that manage to attract FDI today are likely to attract more FDI in the future. [ABSTRACT FROM AUTHOR]

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Purpose: The purpose of this paper is to investigate the effect of flood occurrence on mortality rate and life expectancy amongst 53 African countries. Design/methodology/approach: The study utilizes panel data from the period 2000–2018 on 53 African countries and system generalized method of moments (system GMM) for the analysis. Findings: The result indicates that flood occurrence causes the destruction of health facilities and the spread of diseases which reduces life expectancy. In addition, flood occurrence increases mortality rate amongst 53 African countries. Research limitations/implications: Practical implications: The study recommends that governments amongst African countries should implement strategies being enshrined in Conference of Parties (COP, 2021) on climate change. This will help to reduce the level of climate change and flood occurrence. Originality/value: Previous studies focussed on the adverse effect of flood occurrence without considering the issue of life expectancy amongst African countries. This study contributes to existing empirical studies by examining the effect of flood occurrence on mortality rate and life expectancy amongst African countries. Peer review: The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-07-2022-0508. [ABSTRACT FROM AUTHOR]

Empirical analysis indicates that a policy shift occurred in Sub-Saharan Africa that involved the political elite redirecting their attention to agriculture, resulting in policies that reduced the indirect taxation of this sector. It is hypothesized that this has had two effects: a productivity effect that stimulated the expansion of manufacturing and a reallocation effect that reduced manufacturing. It is hypothesized that initially, the productivity effect was stronger than the reallocation effect, and thus manufacturing expanded as a share of GDP. However, as indirect taxes continue to be reduced the reallocation effect comes to offset the productivity effect and the share of manufacturing in GDP begins to fall. A panel data set for a sample of Sub-Saharan African countries is created and analysis of this data indicates that indeed the hypotheses are supported. [ABSTRACT FROM AUTHOR]

Africa is still struggling to mitigate its electricity insecurity issues. This situation renders foreign direct investment in the renewable electricity industry (FDIREI) and renewable electricity production (REP) to become simultaneously important to Africa. Using a novel dataset of FDIREI, this paper examines the existence and nature of cointegration and causality nexuses among FDIREI, REP, and economic growth (GDP) in 32 African countries over 2003–2019. For methodological robustness purposes; GDP is added. By applying the panel vector autoregression model based-Granger causality test and a static panel data model, which are followed by robustness tests, more informative results are reported. Importantly, we find evidence of the growth hypothesis between REP and GDP, as a unidirectional Granger causality is seen from REP to GDP. Further, the neutrality hypothesis is confirmed among the remaining variables. This left us with the importance of REP in revitalizing African countries' economic growth. All facets of REP thus should be enhanced. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to examine the effect of natural resources on the national productivity of high and low globalized economies in Africa. Design/methodology/approach: This study uses two-step generalized method of moments dynamic panel data of 30 African economies between 2006 and 2016 to achieve the purpose of the study. Findings: The results suggest that natural resources promote productivity within African economies regardless of the level of globalization. However, while natural resources have an overall enhancing effect on national productivity in both high and low globalized economies, the enhancing effect varies according to the forms of globalization. The findings of this study suggest that globalization can alter the nexus between natural resources and national productivity in Africa. The results imply that African Governments and their related policymakers can rely on globalization to promote the effect of natural resources on productivity of African economies. Practical implications: This result is good and welcoming news, especially when natural resources in Africa have been described by prior studies as a curse to the continent. While globalization can be a tool for policymakers in Africa to deploy the positive effect of natural resources on national productivity, they might as well be careful as to which form of globalization they pursue, given that different forms and different levels or extent (high or low) of globalization yields different results on the nexus between natural resources and national productivity. Originality/value: To the best of the authors' knowledge, this study is the first of its kind to examine how natural resources affect national productivity in high and low globalized economies, especially in Africa. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

This paper examines the effect of economic and non-economic factors on international tourist arrival in Nigeria. Annual data on tourist arrival from 53 countries and explanatory variables from 2010-2016 were analyzed using the dynamic panel data regression technique. Results suggest that travel cost, internet use, political stability and number of hotel rooms are the main determinants of tourist flows. The income of tourist-origin countries outside Africa negatively and significantly affects tourist arrival. Travel cost has a robust negative effect on tourists from within and outside Africa. The number of hotel rooms and urbanization rate positively influence tourist arrival, indicating the importance of tourism infrastructure. Government and policymakers must provide an enabling business environment, infrastructure, and policies to improve the country's global competitiveness. [ABSTRACT FROM AUTHOR]

Nowadays globalization seems to be an irresistible phenomenon that affects all countries around the world, including developed and developing countries. In that context, the purpose of this paper is to check whether increasing globalization level spreads happiness in Africa. We employ a dynamic panel data model on 34 African countries over the period 2006–2019 to assess the effect of globalization on happiness. We used the two-step system generalized method of moments estimator to control for potential endogeneity of regressors and unobserved heterogeneity. We find that globalization is positively associated with happiness. Among the sub-indexes of globalization, economic and political globalization enhance happiness while social globalization worsens happiness. In addition, the effects of globalization on happiness are sensitive to the level of human development, democratization and natural resource wealth. Specifically, the positive effect of globalization turns out to be more robust in democratic and non-oil producing countries than in autocratic and oil-producing countries. Similarly, the effects of globalization are positive in high-human development countries while these effects remain negative in low-human development countries. Furthermore, the results also show that unemployment and inflation are the channels through which economic globalization positively affects happiness. [ABSTRACT FROM AUTHOR]

This paper examines the impact of agricultural trade liberalization on agricultural total factor productivity (TFP) growth in Africa using panel data for 13 countries from 2005 to 2016. Our contribution is two-fold. Firstly, we analyse the impact of domestic agriculture support in the spirit of the Agreement on Agriculture. Secondly, we draw attention to the South–South versus South–North debate to the agriculture sector. We examine the impact of trade by source, split between trade within and outside Africa. We compute TFP growth for maize and rice using the Malmquist-data envelopment analysis approach. We then use the dynamic fixed effects approach to estimate panel auto-regressive-distributed-lag models. TFP computations show falling growth rates for both maize and rice. Evidence suggests that domestic agriculture support measures have positive output effects but negative productivity effects. We find that reducing trade-distorting agriculture support coupled with good governance significantly increases TFP growth. Accordingly, we appeal that domestic agriculture support is refocused from producer payments to infrastructure development. Furthermore, we document that South–South trade productivity gains match and can surpass South-North Trade. Hence we emphasize increasing intra-Africa agriculture trade. [ABSTRACT FROM AUTHOR]

Purpose: This research is motivated by the development of dialogue and debate regarding company reporting in the form of sustainability reporting (SR) – which is separate from the annual report (AR) – or integrated reporting (IR). Research into SR and IR is still fascinating, and this study addresses the debate about them. This study aims to examine which of the two reports is more valuable for investors, and also examine whether IR has value relevance because the information in the IR could reinforce the importance of the accounting information. Design/methodology/approach: As with previous studies, we adopted a valuation approach – the Ohlson model – to assess the value relevance of non-financial information (in the form of SR/IR) and financial information. As a preliminary study, we used non-financial information as a binary variable, i.e. a group of companies that issue sustainability reports and a group of companies that issue integrated reports. Therefore, they complement and interact with the financial statements' information. This paper used panel data consisting of 931 firm-years of SR issuers and 922 firm-years of IR issuers in Europe and Africa in the period from 2005 to 2019. Findings: The results showed that SR had a higher value relevance than IR. However, when the authors interact the corporate reporting form with the accounting information, IR had value relevance because the information contained in the IR could reinforce the importance of the accounting information. Practical implications: This study will support regulators in various countries to monitor the reporting practices of companies in those countries. The results of this study provide evidence that sustainability reports get a higher response than integrated reports. However, when interacted with the accounting variables, information in the IR is considered to be more relevant than that found in the SR. Therefore, it is hoped that the results of this study will help the International Integrated Reporting Council (IIRC) in reviewing IR practices around the world so that the implementation of IR practices can be realized in accordance with the mission that the IIRC wants to achieve. Originality/value: Research into the value relevance of SR and IR has been carried out by several previous researchers separately, but to the best of the author's knowledge, there are no studies comparing the value relevance of the two. [ABSTRACT FROM AUTHOR]

This paper examines the impact of access to electricity on internal conflicts in Africa. Using income inequality as a transition variable and a sample of 36 countries, we estimate a panel data model by several regressions, including fixed effects, random effects, generalized least squares and the Driscoll–Kraay method from 1990 to 2017. Our findings show that regardless of the considered dimension, access to electricity reduces the risk of internal conflicts in Africa. However, its effects differ depending on whether a given area is urban or rural. The findings also suggest that income inequality is crucial to reducing internal conflicts in Africa. [ABSTRACT FROM AUTHOR]

The fast growth and unique model of Chinese aid provide new perspectives and empirical evidence for the study of aid effectiveness. This paper employs GIS technology to match Chinese aid projects in Africa with satellite-measured nighttime lights – a proxy of economic development and converts them into 0.5° (longitude) x 0.5° (latitude) panel data. First, we find that Chinese aid projects are positively correlated to Africa's economic development. Second, we gain a deep understanding of the mechanisms and find that the aid-growth relationship is mostly attributed to economic infrastructure aid rather than social welfare projects, direct aid as well as production and other types of projects. Spatial panel regression further validates the robustness of the empirical results and sheds light on the spillover effects of Chinese aid. Moreover, our results also suggest that Chinese aid brings some side effects on the recipient countries, as it may intensify the spatial economic inequalities. [ABSTRACT FROM AUTHOR]

Purpose: Financial inclusion policy focuses on bringing the less privileged groups into the formal financial system. Financial inclusion has a lot of benefits in the society. It can reduce the level of poverty, inequality and encourage business startup. This study aims to examine the impact of financial inclusion on entrepreneurship in selected African countries. Design/methodology/approach: This paper examines how financial inclusion impacts entrepreneurship in 13 selected African countries using data from World Bank Development Indicators, IMF's International Financial Statistics, doing business and World Bank Entrepreneurship Survey for the period of 2005-2016. It uses panel data regression techniques such as random effect, IV estimation and robust least square. Findings: The results show that financial inclusion has a significant and positive effect on entrepreneurship in Africa. This result is robust to both alternative measures of financial inclusion and alternative estimators. Originality/value: The possible relationship between financial inclusion and entrepreneurial development has been an ongoing debate in other developing countries. However, this issue has been neglected in the African region. There are little or no evidence to support the possible relationship in Africa. This paper makes an important contribution in this respect and further provides insightful information in the ongoing debate. [ABSTRACT FROM AUTHOR]

Urbanization and inclusive growth in Africa are very closely linked, and the literature is extremely fertile. The objective of this paper is to determine the effects of urbanization on inclusive growth in a sample of 48 African countries. We specify and estimate respectively a panel data model, fixed effects, Driscoll and Kraay, generalized least squares, robustness via Lewbel two‐stage least squares, and system generalized method of moments over the period 1995–2020. Our results show that urbanization significantly and statistically improves inclusive growth in Africa. We obtain the same result for each regional area (North Africa, West Africa, East Africa, and Central Africa) except for Southern Africa where we find that urbanization rather contributes to worsening inclusive growth. We propose that African policymakers take advantage of current urbanization patterns to effectively plan, manage and deliver U infrastructure technology services such as transport and ICT infrastructure. This will enable the growing population moving from underdeveloped regions to urban centers to access better services and employment opportunities, thereby contributing to economic progress. [ABSTRACT FROM AUTHOR]

This paper provides robust evidence of financial development and international trade liberalization on deregulation in some developing economies. Specifically, it investigates the effect of financial development and international trade liberalization on deregulation in 45 African countries in a panel set between January 1, 1980, to December 31, 2017. It employed the system Generalized Method of Moments (GMM) panel data estimation to address potential endogeneity concerns. Demir and Dahi (2011) showed that system GMM can effectively deal with any endogeneity issue originating from unobserved country-specific effects, and bias. The study found a robust positive effect of financial development and international trade liberalization on deregulation. The key finding was that technological impact is observed when private credit is regressed on market capitalization on Gross Domestic Product (GDP). It found that both GDP and gross per capita negatively impact financial development, conceivably causing the selected African countries' markets to be insulated. [ABSTRACT FROM AUTHOR]

This paper aims to first, develop an analytical framework that examines the role of financial inclusion in promoting investment and economic growth, through the reduction of financial imperfections and considering the heterogeneity of access to the financial system. When performing a comparative analysis of the levels of financial inclusion in Africa, we mobilize the principal component analysis methodology to build the African Financial Inclusion Index (AFIndex). To test the empirical validity of the analytical conclusions, we use a panel data regression technique on a database constituted of 33 African countries over the period 2004-2019. Based on model simulations, financial inclusion stimulates investment and economic growth. Empirical results provide evidence attesting to the fact that financial inclusion has a significant and positive impact on investment and economic growth in Africa. The AFIndex shows that most African economies have a low level of financial inclusion. Our model is original as it provides analytical evidence on the negative impact of financial exclusion on economic growth, emphasizing the vital role of financial inclusion for economic growth. The AFIndex is a useful tool for designing and evaluating policies and/or programs intended for promoting financial inclusion in Africa. [ABSTRACT FROM AUTHOR]

This paper investigated the effect of banking regulations and supervision on the profitability and risk profile of banks in selected African countries over the period 2009 to 2019. The study focused on 33 banks operating across 9 African countries, namely South Africa, Uganda, Kenya, Tunisia, Egypt, Namibia, Zambia, Nigeria and Ghana, as representative of the continent. It includes data from some of the major economies in the continent such as South Africa, Nigeria and Egypt to ensure that regulatory and supervisory developments in the continent are analysed appropriately. The analyses of the various interrelations were done using dynamic panel data modelling, Cointegration, and error correlation modelling approaches using Eviews statistical software. The study uses an unbalanced panel of commercial banks in the selected countries to estimate the model with both the return on equity and the return on assets as proxies for profitability. Overall, evidence shows that a well-regulated, stable and supervised banking sector is critical in the sustainable economic growth of the prospective economies. The findings of the study, however, provide an interesting outcome, in contrast to other studies, highlighting that the coefficient of the capital adequacy ratio is negative and statistically not significant to the profitability. This reflects the weak financial conditions in most African countries. The negative and statistically insignificant capital adequacy ratio could also be a reflection of the unacceptable risk profile of banks in the continent. Besides the literature reflecting that adjustment in the inflation rate improves banks' profitability, this study contrasts with this view, a further reflection of the uniqueness of the banks operating environment in the continent. This output cautions banks in Africa on the profile of risks that they should take as this could impact negatively on their profitability during periods of increasing inflation. This again offers important policy implications for regulators of banks and policymakers in Africa regarding the regulations and supervisory frameworks that relate to on boarding of clients and management of the loan portfolios. [ABSTRACT FROM AUTHOR]

This paper analyses the implications of cross-border banking (CBB) and institutional quality (IQ) for bank competition in Africa. It applies a two-step estimation procedure using bank-level panel data for 29 African countries. In step one, the Boone indicator and the Lerner index are used to gauge bank competition in a given country in Africa. In the second step, it analyzes the sources of bank competition placing emphasis on the impact of CBB and IQ. The results suggest that competition increased in the period of 2002–2005, before decreasing somewhat between 2006 and 2007 and increasing again thereafter. The results also show that cross-border banking enhances bank competition in African countries with stronger governance structures and institutional quality. These results are robust to an array of controls including an alternative methodology, variable specifications, and the regulatory environments that banks operate in. [ABSTRACT FROM AUTHOR]

Purpose: This paper provides an analysis of the energy-carbon Kuznets curve hypothesis (CKC) using a second-generation panel methodology. Design/methodology/approach: Specifically, the authors investigate whether energy consumption, natural resources and governance explain the CKC proposition. The study's empirical strategy is based on the Westerlund panel cointegration test, augmented mean group (AMG) and vector autoregressive (VAR) panel Granger-causality tests. Findings: The results suggest that the CKC hypothesis is incomplete without these mechanisms, as they play a critical role in reducing carbon emissions in Africa. The authors recommend improving the environmental standards and proper regulatory and monitoring systems to reduce carbon emissions and promote sustainable development in the continent. Originality/value: The study revisits the CKC hypothesis with particular emphasis on governance and more robust empirical estimation techniques. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to examine the effect of foreign bank assets (FBA) and (FBP) presence is examined on banking stability in the economies with strong and weak country-level corporate governance (CLCG) in Africa between 2006 and 2015. Design/methodology/approach: Using a Prais–Winsten panel data model of 86 banks in about 30 African economies, findings on how FBA and presence influence banking stability in strong and weak corporate governance economies under different regulatory regimes are reported for the first in Africa. Findings: The findings show that foreign bank presence (FBP) and assets promote banking stability. However, the positive effect of FBA and presence is enhanced in economies with strong CLCG, whereas the positive effect of FBA and presence is weakened in economies with weak CLCG. After introducing different regulatory regimes, it is observed that the enhancing effect of FBP and assets on banking stability in the full sample and economies with strong and weak CLCG systems is deepened or improved under the loan loss provision regulation regime. However, under the private and public sector-led financial transparency regulations, the reducing effect of FBP and assets on banking stability in economies with weak corporate governance systems is further dampened. Practical implications: These findings show that the relationship between FBP and assets is deeply shaped by corporate governance systems and regulatory regimes in Africa. Hence, policymakers must build strong corporate governance and sound regulatory regimes to enhance how foreign bank operations promote banking stability. Originality/value: This study presents first-time evidence on how FBA and presence influence banking stability under strong and weak governance systems while considering different regulatory regimes. [ABSTRACT FROM AUTHOR]

This paper analyzed the factors that drive foreign direct investments (FDI) by looking at regional heterogeneity among the five African regions. For the first time, FDI drivers are analyzed for each of the five regions of Africa contrary to previous studies which focused on Africa as a whole. The paper used a panel dataset from 1970 to 2010 of 53 African countries divided into: Central, East, North, Southern, and West Africa. Ordinary least squares (OLS) and generalized method of moments (GMM) techniques are used for the estimations. The main results indicate that: (i) agglomeration has a strong positive relationship with FDI inflows in all the regions except Central Africa. However, in West Africa, the second lag of FDI is significantly negative; (ii) there is a negative relationship between FDI inflows and GDP per capita in all the five regions, but a U-shaped relationship is observed in Central, North, and West Africa. But GDP growth rate has a strongly positive relationship with FDI inflows in Central Africa but negatively significant in West Africa; (iii) FDI follows domestic investment in East, Southern, and West Africa; (iv) democracy is a major factor in attracting FDI to Southern Africa, being upward concave; (v) infrastructure development has a positive impact on FDI inflows in East and North Africa; (vi) trade openness has a positive relationship with FDI inflows in all the five regions except in East Africa; (vii) inflation deters FDI inflows to East Africa; (viii) the level of urbanization has a strong positive relationship with FDI inflows only in West Africa; (ix) net foreign aid has a negative relationship with FDI inflows to East, North, and Southern Africa; (x) higher life expectancy deters FDI inflows to Central Africa but promotes the same to East and North Africa; (xi) metal production and exportation attract significant FDI to Central Africa while oil production and exportation attract higher FDI to West Africa; (xii) monetary union attracts greater FDI to Central and West Africa; and (xiii) political instability is a strong hindrance to FDI inflows to West Africa. [ABSTRACT FROM AUTHOR]

This paper investigates the nonlinear relationship between tourism and economic growth using a balanced sample of 58 countries in three continental samples (Africa, Asia, and Latin America) for the 2003–2017 period. First, we document an asymmetric threshold effect of tourism on economic growth. By utilizing an endogenous threshold regression model, we show that a single tourism threshold cutoff exists and that tourism receipts influence growth only till the threshold cutoff point in all three continental samples; however, this influence is nonexistent past the threshold point. Second, a quantile effect decomposition shows separate marginal effects for the tourism and economic growth relationship across the growth distribution. By using an unconditional quantile regression approach, we show that compared to their regional cohorts, slow- and medium-growth African countries, slow-growth Asian countries, and medium-growth Latin American countries exhibit substantially higher economic growth benefits from tourism. We explain these empirical observations and discuss their policy implications. [ABSTRACT FROM AUTHOR]

Using the electricity access rate to measure progress towards the Sustainable Development Goal target for universal access to electricity by 2030, about 580 Millions African people lack electricity access. However, globalization offers technological innovation, financial resources and international cooperation opportunities to achieve universal electricity access. This paper investigates whether increasing globalization levels can help achieve the goal of expanding access to electricity services in Africa. The analysis is based on panel data of 36 African countries over the 2000–2017 period and system GMM for empirical estimations. Our findings indicate that economic, social, and political globalization matters for increasing access to electricity. We also find that economic globalization reduces disparities in access to electricity. Further decomposing of economic globalization indicates that financial globalization, FDI and trade openness increase access to electricity. Furthermore, while financial globalization and FDI widen disparities in access to electricity, trade openness negatively affects disparities. The results also indicate that economic growth is one of the important channels through which globalization enhances electricity access. Finally, we carry out sub-regional analyses and find that these patterns are robust across Sub-Saharan African countries. [ABSTRACT FROM AUTHOR]

The relationship between corruption and economic development remains controversial, with one strand of literature arguing that "corruption sands the wheels of economic development" and another that "corruption greases the wheels of development." This paper contributes to the literature on the corruption trap by assessing its causes and consequences using unbalanced panel data for 40 African countries during the 1995-2019 period. The empirical findings reveal evidence of the persistence of corruption in Africa. Granger Panel Causality tests highlight that development levels and economic freedom have bi-directional causality with corruption, while there is a unidirectional causality going from corruption to development assistance level, globalization, inequality levels, CO2 emissions, and the natural resources rents. Hence, the difficulty of changing the high corruption equilibrium in Africa and other developing regions is associated with its persistence on the one hand and its causes and consequences on the other, which must be incorporated to create effective anticorruption policies. [ABSTRACT FROM AUTHOR]

HIV/AIDS and child malnutrition are pervasive in eastern and southern Africa. This paper employs cross‐country panel data on 20 countries from 1991 to 2017 to explore the macro‐level relationship between HIV/AIDS and child malnutrition. Using instrumental variables (IV) regression, we find that HIV/AIDS is a robust predictor of long‐term and chronic malnutrition. Conditional on various controls, the results demonstrate a positive empirical association between HIV/AIDS and stunting. Moreover, increased access to improved water, female education, and food availability are critical for reducing stunting. These findings underscore the need for an integrated national policy on nutrition and HIV/AIDS and intersectoral collaboration between government agencies responsible for managing nutrition and HIV/AIDS programs. [ABSTRACT FROM AUTHOR]

This paper tests the hypothesis of a negative relation between openness and inflation in the context of African countries. A dynamic model of inflation in which openness enters alternately as an endogenous and exogenous variable is estimated with different panel data estimation procedures. The paper finds no robust evidence that openness served as a mechanism to restrain inflation in the region. On the contrary, the results suggest that increased openness, treated as an endogenous variable, is associated with higher inflation on holding constant such factors as food supply constraint and level of economic development which are found significant co-determinants. [ABSTRACT FROM AUTHOR]

This paper examines the influence of financial slack on the method of payment and financial performance of acquirers targeting African firms. Using panel data estimation techniques and controlling for, inter alia, firm and deal specific factors, we find no evidence that financial slack has a statistically significant influence on the means of payment. However, firms with high leverage have a higher propensity to acquire a target by using cash. Furthermore, we document a weak association between financial slack and acquirer post-acquisition performance. When we classify firms in terms of the degree of financial slack and considering the method of payment, we find that firms with a low degree of financial slack generate negative long-run operating returns. These results are consistent across the method of payment used. Conversely, firms with a high degree of financial slack that use cash and a combination of financing sources yield positive and statistically significant long-run operating returns. We further show that undervalued firms are significantly more likely to use cash as a form of payment. [ABSTRACT FROM AUTHOR]

Purpose: African countries are generally fragile. This and other related characteristics affect the potential for growth and development. The purpose of this paper is to investigate whether the effect of FDI on economic growth is contingent on a financial system that accounts for financial market fragility. An important point of departure from earlier studies is the adoption of a new measure of financial market fragility. Design/methodology/approach: Given the uniqueness of the data set, the study uses a panel data and estimates an econometric model using an instrumental variable approach. For robustness purposes, a pooled ordinary least square is also estimated. Findings: The study provides evidence that if the financial market is fragile as in the case of Africa, FDI inflows may have a marginally significant positive impact on economic growth. The findings suggest that fragility in the financial market is a key absorptive capacity and cannot be trivialised when exploring FDI–growth nexus in Africa. Research limitations/implications: The uniqueness of the data set limited the time period of the study. Nonetheless, the findings are still crucial to policy makers in Africa and other developing countries with similar characteristics. Originality/value: To the best of the authors' knowledge, this is the first study in Africa to investigate the FDI–growth nexus which accounts for financial market fragility. [ABSTRACT FROM AUTHOR]

This paper examines the role of institutional factors, primarily, political stability, in shaping the dynamics of innovation activity in today's modern society. Using panel data consisting of 26 African countries from the period between 1996 and 2016 as well as employing the negative binomial estimate, we model the impact of those factors on the number of applications for patents per resident. GDP per capita, education and also other institutional factors including the rule of law and financial freedom. The results reveal a strong positive effect of the rule of law on patenting activity. [ABSTRACT FROM AUTHOR]

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Medical brain drain remains a major challenge for African countries mostly characterized by poor economic, political and health institutions. This paper seeks to determine how corruption in the home country affects physician emigration from Africa. Econometric estimations are implemented on a panel of 50 African countries over the period 1995-2004, using both the dynamic panel data approach and the count data analysis. Our results suggest that: first, corruption promotes physician emigration from Africa. The most corrupt countries experience higher physician emigration rates. Second, income level, especially the returns to education, is one of the channels through which corruption promotes physician emigration. To ensure retention of African health-care professionals and ultimate reduction in medical brain drain, the fight against corruption must be one of the essential measures. [ABSTRACT FROM AUTHOR]

In theory, trade intensity should positively affect the quality of domestic institutions and governance; the higher the economic openness, the lower the corruption. In practice, however, the growth of economic openness has not been accompanied by the expected improvements in corruption for 34 African countries between 1990 and 2009. This paper presents a plausible explanation for this conundrum. Results from panel data regression analyses indicate that a switch from trading with the Advanced Economies to trading with China increases the perceived corruption level. For instance, in a 'representative' African country, a 10% point substitution from trading with the Advanced Economies to trading with China makes its ICRG corruption score decline-indicating increased corruption-by 29%. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to evaluate how audit committee (AC) characteristics affect the performance of banks in Africa. Design/methodology/approach: The authors manually generated unbalanced panel data from 78 commercial banks operating in twelve (12) countries whose annual reports were published on the website of African Financials between 2010 and 2020. Findings: The results indicate that AC size has an insignificant positive association with bank performance (return on equity and Tobin's Q). AC independence has a significant positive association with bank performance. However, AC gender diversity has a significant negative association with bank performance. Besides, AC financial expertise has a significant positive and negative association with return on equity and Tobin's Q, respectively. Research limitations/implications: The study considered only 78 banks that operate in twelve (12) African countries. Besides, the authors consider only four (4) AC attributes. Practical implications: The findings suggest the need to maintain a smaller AC, appoint more independent members to AC, reduce the number of women appointed to AC and ensure most AC members have financial expertise. These measures could improve bank performance in Africa. Originality/value: Unlike previous African studies that are mostly restricted to a country level, the study examined how AC attributes influence the performance of banks that operate in Africa. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to examine the drivers of companies' compliance with International Financial Reporting Standards (IFRS) using the stakeholder salience theory. Design/methodology/approach: The authors have used panel data from 205 companies to examine the IFRS compliance level across 13 African countries. This study has also established the relationship between stakeholders' attributes and firms' compliance with IFRS. Findings: On IFRS compliance, the authors found that the average compliance score among the companies over the period was 73.09 per cent, with a minimum score of 62.86 per cent and a maximum of 85.61 per cent. The authors found a significant positive association between audit committee competence and compliance, as well as among chartered accountants on board. There is less compliance with the latest standards, such as IFRS 3, 7 and 13. Also, IAS 17, 19, 36 and 37 are problematic across the sample. The authors also found that compliance has been increasing over the years. Practical implications: For companies, this study provides empirical evidence on the importance of having chartered accountants' corporate boards, as well as competent audit committees involved in ensuring high compliance with IFRS. The findings also provide valuable information for professional accounting organizations on the role of their members (chartered accountants) in the effectiveness of IFRS compliance. Originality/value: This study complements and updates prior studies on IFRS compliance with findings from Africa, a region that has been neglected in the literature. It provides empirical evidence on the importance of chartered accountants sitting on corporate boards in ensuring high compliance with IFRS. [ABSTRACT FROM AUTHOR]

Objective -- The manufacturing sector plays an important role in any economy. However, Africa has experienced significant deindustrialisation over the last few decades, whilst economic growth has been on an upward trend over the same period. The high growth rates have mostly been propelled by improved macroeconomic stability and the commodity price boom. Further, the slowdown in commodity prices has recently caused a deceleration of economic growth which begs the question: Does promoting the manufacturing sector result in higher and sustainable economic growth and reduce unemployment? This study assesses the impact of the manufacturing sector on economic growth in 37 African countries. Methodology/Technique -- This study employs the System-GMM Model for the period between 1990 and 2017. This technique is ideal as the number of cross-sectional units is greater than the number of time periods. This technique also caters for problems of endogeneity and heteroscedasticity. Findings -- The results show that manufacturing value has a positive effect on economic growth in African countries. Therefore, it is recommended that policy makers enact measures to boost manufacturing output. Novelty --The deceleration of economic growth in African countries coupled with high unemployment and poverty levels has brought the issue of re-industrialisation into the spotlight. This study is vital for policy makers in African countries who seek to promote economic growth and employment levels. The study contributes to literature in African countries by incorporating variables such as human capital and institutional quality which are major determinants of economic growth. [ABSTRACT FROM AUTHOR]

As open economies, African countries need to diversify their exports for economic transformation, sustained growth, and development. Meanwhile, there has been increasing importance of development financing. Following the discussion of theoretical issues on the importance of domestic credit as a potential instrument for overcoming the liquidity constraint of developing countries, as in the case of Africa, this paper empirically explores the determinants of export diversification, with particular attention to domestic credit. The estimation is based on a five-year panel regression analysis for the 1962–2010 period involving 80 countries around the world, of which 62 are developing and 29 African countries, using as covariates variables traditionally viewed as affecting export diversification. System GMM estimates provide robust evidence supporting the importance of domestic credit for African countries, while its role in other countries seems rather marginal. In addition, human capital in the form of schooling, governance as measured by constraint on the chief executive of government, and being land-locked, all exert significant effects, as anticipated, on export diversification among African countries. However, except for governance, appropriately controlling for the interactive effect of domestic credit with 'Africa' yields generally insignificant impacts of these variables, together with domestic credit, on export diversification in non-African countries. These results point to the dominant role of domestic credit in Africa vis-à-vis other countries globally. [ABSTRACT FROM AUTHOR]

This paper examines the importance of relative deprivation in Tanzania, a poor African country, using three waves of the Tanzanian National Panel Survey. We contribute to earlier literature in Africa by controlling for time persistent unobservable individual characteristics (panel data) and, most important, by using two measures of satisfaction (life and financial satisfaction), two definitions of the reference group, and testing different hypothesis. By comparing results between satisfaction measures and across definitions of reference groups we can understand the mechanisms through which comparisons work in a poor setting. In contrast with earlier literature, we find strong evidence of relative deprivation in financial satisfaction of all individuals in Tanzania, and evidence for life satisfaction only for individuals with weaker ties with their community. For those with strong ties (45% of our total sample; 52% of the rural sample), we find evidence of a positive correlation between life satisfaction and the leave-out mean consumption of close neighbors and argue that this can be explained by feelings of empathy. We argue in favor of taking comparisons to others into account when assessing and introducing welfare policies, also in less developed countries. [ABSTRACT FROM AUTHOR]

We discuss the link between financial development and economic growth through Total Factor Productivity (TFP) canal in African economies. First, we use a composite index to hierarchize financial development in 40 African countries. Then, we study this relationship by using the methodology of panel data based on the Breusch-Pagan LM Test and Hausman Test, to determine the nature of the specific effect, in a panel of 22 economies. The main results of our study show that the development of the financial sector does not promote total factors productivity in low-income and upper-middleincome countries. For the lower middle-income countries, the Finance-TFP relationship is significantly positive. The reforms of African financial systems should be designed and directed to increase the adequacy of financial services with the needs of each economy. [ABSTRACT FROM AUTHOR]

• Market services have proved to behave as a key sector in fuelling economic growth in developing regions. • Distributive trade and business services show strong increasing returns of scale. • Business services are particularly relevant for output and productivity increases. The paper analyses the contribution of services vis-à-vis manufacturing as a driving force of economic growth in developing regions. In doing so, we test Kaldor´s first and second growth laws for different service categories, providing a comparative view across Asia, Latin America, and Africa. The work focuses attention on the importance of sector-level disaggregation in exploring the relationship between productivity and economic growth. Hence, it accounts for services sector heterogeneity to help to disentangle those specific branches that may fuel economic growth in the different regions. Panel data estimations are performed for a sample of 32 countries during 1970–2010. Our findings support the key role of manufacturing for growth. However, they also emphasise how market services (particularly, business service activities) may also enhance productivity and output growth 'à la Kaldor'. The research supports recent claims for modernising industrial policy in a way that promotes but is not limited to manufacturing. [ABSTRACT FROM AUTHOR]

This paper examines the long-run money-inflation relation for 36 African countries using cross-section and panel data analysis. The focus is on the recent claim by De Grauwe and Polan that the common finding in multi-country studies of a strong positive link typically reflects the presence of high-inflation countries in the sample and on Nelson's criticisms of the data and methodology employed in that study. Adjusting the De Grauwe and Polan methodology to take account of many of Nelson's criticisms, I confirm a weak long-run relation between money growth and inflation for countries when money growth and inflation are below 10%, but a strong relation when money growth and inflation move much above that number. This result is not dependent on the inclusion of high inflation countries in the cross-section and panel data samples. [ABSTRACT FROM AUTHOR]

The danger of export dependent economies is exposure to external shocks, that weakens the domestic economy, which is evident in countries exporting oil in Africa. The fortunes from increased oil revenue by these countries, have been sabotaged through the same shocks in oil prices, leading to inconsistencies in monetary policy. This article examined responses of monetary policy in oil exporting African countries [OEAC] to oil prices and by extension its effect on manufacturing sector's productivity. Previous research had mixed results on the relationship with inflation and its effect on growth, leading to an ambivalence as per the effect on manufacturing industries' output. The error correction panel data method was employed in our investigation and it favours structural dynamism as against dynamism of residuals without the usual factor imposition. Three stages of tests [unit root, cointegration and short/long run estimations] were performed. Long run weak association was observed for monetary policy coefficients and that of the productivity growth rate of the manufacturing unit of OEACs. Both the panel and static results have more influence in the short run than in the long run as far as the monetary policy coefficients are concerned. A substantive positive relationship exists for currency undervaluation as well as the productivity growth rate of the manufacturing section of OEACs. This suggests that a decrease in the price of a currency can influence local production and therefore boost real sector advancement. Our results also confirmed the existence of inverse association between the growth rate of the manufacturing unit plus net domestic credit. It is an outcome that lend credence to existing findings about growth and undervalued currencies in many developing economies. [ABSTRACT FROM AUTHOR]

In this paper, we try to understand the impact of a traffic convention, rule of the road , on road fatality rate in Africa. Using the country level panel data on road fatality rates provided by World Health Organization, we try to find whether left side driving rule has any differential causal impact on road fatalities. To address issues related to endogeneity, we instrument 'Left Side Driving Rule' with the measure for 'British Colonization'. Our estimates suggest that the left side driving rule results in lesser road fatalities when compared to the right side driving rule. The illegal usage of 'Right Hand Drive' vehicles in right side driving countries and functional superiority of left side driving rule are the potential channels causing this effect. With Africa bearing the highest 'disease burden' of traffic fatalities in the world, our research provides a preliminary empirical insight into the role that 'rule of the road' traffic convention can play in this regard. • Empirical analysis of the impact of driving side practice on road fatalities in Africa. • Used Instrument variable design to study the causal impact of left side driving rule. • Analysis based on 4-year country level panel data for 54 African nations. • Results suggest that left side driving rule causes lesser road fatalities. • Possible channels: Functional superiority of the rule and illegal 'hand' vehicles. [ABSTRACT FROM AUTHOR]