Search

The paper investigates the dynamic relationship between renewable energy usage and trade performance in sub-Saharan Africa (SSA), while considering the conditioning role of corruption control, regulatory quality, and the private sector access to finance. Focusing on 42 SSA countries for the period 2004–2016, and engaging the System generalized method of moments (GMM) technique for its estimation, this study found a negative relationship between renewable energy usage and the indicators of trade performance. However, with corruption control, improved regulatory framework, and better finance for the private sector, there are potentials for a positive net impact of renewable energy usage on manufacturing export. For renewable energy and total trade nexus, we find that improved regulatory framework, and better finance for the private sector are important conditioning structures. These findings are significant because they highlight the different important structures of SSA countries that improves the effect of renewable energy use on trade outcomes. For instance, the consideration of the financial, institutional and regulatory frameworks in SSA countries in conditioning the renewable energy-trade nexus stipulates a clear policy pathway for countries in this region as the debate for transition to the use of renewable energy progresses.

We revisit the effectiveness of IFRS adoption for FDI attractiveness by considering the adopting country's institutional structure. Attention was on the extent of corruption control (as a measure of institutional structure). Data was tested on 42 African countries for the period 2001-2012. Using the Panel Corrected Standard Error (PSCE) estimation technique, our result suggest that the effect of IFRS adoption on foreign investment differs based on the level of corruption control instituted in the sample countries. When the variable – IFRS adoption, was tested for the sample with corruption control below the median value, the coefficient was either negative or insignificant. However, the opposite was seen for the category of countries with corruption control above the median value. This result was robust to the inclusion of alternative measures of corruption, foreign investment, and control of global financial crisis and legal origin of the country.

Financing sustainable development in Africa requires financing options that is best for development in the region without further escalating other societal problems. This chapter takes stock of financing options previously advocated for financing development in the African region such as development assistance and foreign investment. By considering its implication on development outcomes like poverty, inequality, and aggregate human development, some drawbacks still exist. Therefore, the chapter identifies, reconfigures and reinvents other financial flows such as mutual support networks, agricultural cooperatives, crowd funding, fiscal responsibility, other forms of informal banking, and remittances, among others to African countries for efficient provision of structures that can aid in the sustenance of development. We conclude that these alternative means of financing development could be a viable policy option to bridge income and development gaps; thereby mainstreaming the process for financial inclusion and sustainability.

Investment in ICT infrastructure development is crucial to international trade through its provision of reliable interconnectedness via communication. This can be augmented via institutional intervention, which addresses opportunistic or rent-seeking behaviours of ICT infrastructure providers and reduces operational costs, among others. However, ICT infrastructural provision in West Africa remains low, necessitating the current drive by the regional economic community (ECOWAS) to make some advancement in this regard for enhanced trade outcomes of members. With the aim of unbundling institutional framework in the infrastructure-export nexus, this study empirically examines the relationship between manufacturing export and ICT infrastructure and articulates how economic and political institutions influence such interaction. Focusing on 14 West African countries, the study uses the Systems Generalised Method of Moments (SGMM) technique to address possible issues of endogeneity and reverse causality. The results reveal that in the face of improved economic and political institutions, particularly those related to enforcement of contracts, the influence of ICT infrastructure in strengthening the exporting capacity from the manufacturing sector is greater. In addition, some measures of economic and political institutions matter more than others. The study recommends that ECOWAS countries promote better institutional quality, particularly in terms of transparency, accountability, corruption control, regulatory quality and the rule of law.

This study assesses the relationship between globalisation and the economic participation of women (EPW) in 47 Sub-Saharan African countries for the period 1990-2013. EPW is measured with the female labour force participation and employment rates. The empirical evidence is based on Panel-corrected Standard Errors and Fixed Effects regressions. The findings show that the positive effect of the overall globalisation index on EPW is dampened by its political component and driven by its economic and social components, with a higher positive magnitude from the former or economic globalisation. For the most part, the findings are robust to the control for several structural and institutional characteristics. An extended analysis by unbundling globalisation shows that the positive incidence of social globalisation is driven by information flow (compared to personal contact and cultural proximity) while the positive effect of economic globalisation is driven by actual flows (relative to restrictions). Pol icy implications are discussed with some emphasis on how to elevate women's social status and potentially reduce their victimisation to male dominance.

The paper assesses how remittances directly and indirectly affect industrialisation us ing a panel of 49 African countries for the period 1980-2014. The indirect impact is assessed through financial development channels. The empirical evidence is based on three interactive and non-interactive simultaneity-robust estimation techniques, namely: (i) Instrumental Fixed Effects (FE) to control for the unobserved heterogeneity; (ii) Generalised Method of Moments (GMM) to control for persistence in industrialisation and (iii) Instrumental Quantile Regressions (QR) to account for initial levels of industrialisation. The non-interactive specification elucidates direct effects of remittances on industrialisation whereas interactive specifications explain indirect impacts. The findings broadly show that for certain initial levels of industrialisation, remittances can drive industrialisation through the financial development mechanism. Policy implications are discussed.

This study explores the extent to which regional integration can be a viable tool in driving energy sustainability in the Economic Community of West African States (ECOWAS) sub-region of Africa, and vice versa. It examines the existing opportunities and the attendant challenges for improved firms' productivity in the sub-region through the appraisal of the ECOWAS West African Power Pool (WAPP). Using three measures of energy sustainability, namely: energy security, energy equity, and environmental sustainability; the study presents the performance of the ECOWAS sub-region in ensuring regional integration for energy sustainability. The findings from the study reveal, inter alia, that there are prospects and benefits for energy integration for sustainable development in the region. Though some progress had been made, there are many challenges. Also, where progress had been made, it is not uniform across the sub-region, though factors such as rising population and political instability could be responsible. It is recommended that the political economy surrounding regional energy integration should be given a priority among the Member States to ensure that there is positive political will for speedy achievement of set goals. Also, investment in human capital to manage the different projects and maintain the facilities cannot be overemphasised.

The paper investigates the dynamic relationship between renewable energy usage and trade performance in sub-Saharan Africa (SSA), while considering the conditioning role of corruption control, regulatory quality, and the private sector access to finance. Focusing on 42 SSA countries for the period 2004-2016, and engaging the System generalized method of moments (GMM) technique for its estimation, this study found a negative relationship between renewable energy usage and the indicators of trade performance. However, with corruption control, improved regulatory framework, and better finance for the private sector, there are potentials for a positive net impact of renewable energy usage on manufacturing export. For renewable energy and total trade nexus, we find that improved regulatory framework and better finance for the private sector are important conditioning structures. These findings are significant because they highlight the different important structures of SSA countries that improve the effect of renewable energy use on trade outcomes. For instance, the consideration of the financial, institutional and regulatory frameworks in SSA countries in conditioning the renewable energy-trade nexus stipulates a clear policy pathway for countries in this region as the debate for transition to the use of renewable energy progresses.

This study complements existing literature by investigating how the advancement in information and communication technology affects the formal economic participation of women. The focus is on 48 African countries for the period 1990-2014. The empirical evidence is based on Ordinary Least Squares, Fixed Effects and the Generalized Method of Moments regressions. The results show that improving communication technology increases female economic participation with the following consistent order of increasing magnitude: mobile phone penetration; internet penetration, and fixed broadband subscriptions. The findings are robust to the control for heterogeneities across countries. Policy implications are discussed.

This study provides a comprehensive assessment of firms' operation and environmental protection polices in Nigeria and Ghana, where there has been a rising industrial growth amidst low regulatory and institutional frameworks. We analyze the extents to whic h firms' adoption of environmental protection policies affect their performances. We use firm-level data of 842 firms (447 for Nigeria and 395 for Ghana) distributed across different regions of both countries for our descriptive and econometric estimations. We find, among other things, that firms' adoption of internal policies on environmental protection is dismally low in both Nigeria (32 percent) and Ghana (17 percent), with policies focused on reducing solid (38 percent, Nigeria; and 35 percent, Ghana), gaseous (22 percent, Nigeria; and 44 percent, Ghana), and liquid (24 percent, Nigeria; and 14 percent, Ghana) pollution. Training appears to be an important intervention that can help improve firms' adopt ion of such policies. We also found that firms' adoption and implementation of environmental protection policies significantly improve their performance.

This paper examines the effect of foreign aid in the terrorism-FDI nexus while considering the extent of domestic corruption-control (CC). The empirical evidence is based on a sample of 78 developing countries. The following findings are established: the negative effect of terrorism on FDI is apparent only in countries with higher levels of CC; foreign aid dampens the negative effect of terrorism on FDI only in countries with high levels of CC. The result is mixed when foreign aid is subdivided into its bilateral and multilateral components. Our findings are in accordance with the stance that bilateral aid is effective in reducing the adverse effect of terrorism on FDI. Multilateral aid also decreases the adverse effect of other forms of terrorism that can neither be classified as domestic nor as transnational. Policy implications are discussed.

This study examined remittance and bank breadth in Nigeria, using data from the 2011 World Bank Households Survey for the African migration project in Nigeria. The results-based on logistic regression technique reveal - that remittance has an inverse relationship with bank breadth. The reason put forward is that recipients prefer to hold foreign exchange from remittance and they do not increase their demand for banking services. One of the key implications of the findings is the need for commercial banks to go beyond mere serving as liaison for remittance but incorporating elements of advisory services to the customers, especially those that frequently receive remittance, on how they can best utilize such fund for productive activities.

This study assesses the relationship between globalisation and the economic participation of women (EPW) in 47 Sub-Saharan African countries for the period 1990-2013. Two indicators are used to measure EPW, namely, the: female labour force participation and employment rates. The empirical evidence is based on Panel-corrected Standard Errors and Fixed Effects regressions. The findings show that the positive effect of the overall globalisation index on EPW is dampened by its political component and driven by its economic and social components, with a higher positive magnitude from the former or economic globalisation. For the most part, the findings are robust to the control for several structural and institutional characteristics: varying conditioning information sets, changes in the growth of urban population, government consumption, legal systems, resource wealth, health, technological advancement, political strife and conflicts, income levels and levels of industrialisation. An extended analysis by unbundling globalisation shows that the positive incidence of social globalisation is driven by information flow (compared to personal contact and cultural proximity) while the positive effect of economic globalisation is driven by actual flows (relative to restrictions). Policy implications are discussed.

We investigate how foreign aid dampens the effects of terrorism on FDI using interactive quantile regressions. The empirical evidence is based on 78 developing countries for the period 1984-2008. Bilateral and multilateral aid variables are used, while terrorism dynamics entail: domestic, unclear, transnational and total number of terrorist attacks. The main finding is that foreign aid cannot be used as a policy tool to effectively address a hypothetically negative effect of terrorism on FDI. The positive threshold we cannot establish is important for policy makers because it communicates a cut-off point at which foreign aid completely neutralizes the negative effect of terrorism on FDI. From the conditioning information set, we also establish for the most part that the effects of GDP growth, infrastructural development and trade openness are an increasing function of FDI. Policy implications are discussed.

This study investigates how technological advancement improves gender identity by means of female economic participation in a panel 48 African countries for the period 1990-2014. Two indicators are used to measure female economic participation, namely, the: female labour force participation and employment rates. Technological advancement is measured with three main indicators, notably: internet penetration, mobile phone penetration and fixed broad band subscriptions. The empirical evidence is based on Ordinary Least Squares, Fixed Effects and System Generalized Method of Moments regressions. The findings show that improvement in technology increases female economic participation with the following consistent order of increasing magnitude: mobile phone penetration; internet penetration and fixed broad band subscriptions. The findings are robust to the control for: countries’ levels in economic development; the use of contemporary technology advancement indicators; internal conflicts and political stability; the level of social globalization and the use of alternative instruments. Policy implications are discussed.

This study used the matching technique to explore the impact of financial inclusion on the performance of manufacturing firms in Nigeria. Most studies that have considered financial inclusion have largely focused on household access to the services of financial institutions, but have inadvertently underexplored the impact on the performance of firms, especially in developing countries like Nigeria. On the one hand, financial inclusion is measured using a multidimensional measure, which includes (i) firms having between 20-40 percent of their working capital financed through borrowing from the bank; (ii) firms having an overdraft facility to finance their operation and (iii) firms having a line of credit or loan from a financial institution. On the other hand, firm performance is measured using the lag total annual sales value of the firm in local currency unit. From the matching estimation, we find that whereas firms perform better with the aid of access to bank services, the extent differs in relation to the type of access they have. We interpret these results as showing that financial deepening increases firms’ performance only dependent on the type of financial inclusion that is being observed.

We revisit the effectiveness of IFRS adoption for FDI attractiveness by considering the adopting country's institutional structure. Attention was on the extent of corruption control (as a measure of institutional structure). Data was tested on 42 African countries for the period 2001-2012. Using the Panel Corrected Standard Error (PSCE) estimation technique, our result suggest that the effect of IFRS adoption on foreign investment differs based on the level of corruption control instituted in the sample countries. When the variable – IFRS adoption, was tested for the sample with corruption control below the median value, the coefficient was either negative or insignificant. However, the opposite was seen for the category of countries with corruption control above the median value. This result was robust to the inclusion of alternative measures of corruption, foreign investment, and control of global financial crisis and legal origin of the country.

The paper assesses how remittances directly and indirectly affect industrialisation in a panel of 49 African countries for the period 1980-2014. The indirect impact is assessed through financial development channels. The empirical evidence is based on three interactive and non-interactive simultaneity-robust estimation techniques, namely: (i) Instrumental Fixed Effects (FE) to control for the unobserved heterogeneity; (ii) Generalised Method of Moments (GMM) to control for persistence in industrialisation and (iii) Instrumental Quantile Regressions (QR) to account for initial levels of industrialisation. The non-interactive specification elucidates direct effects of remittances on industrialisation whereas interactive specifications explain indirect impacts. The findings broadly show that for certain initial levels of industrialisation, remittances can drive industrialisation through the financial development mechanism. Policy implications are discussed.

This study assesses the effect of globalisation on governance in 51 African countries for the period 1996-2011. Ten bundled and unbundled governance indicators and four globalisation variables are used. The empirical evidence is based on Generalised Method of Moments. The following findings are established. First, on political governance, only social globalisation improves political stability while only economic globalisation does not increase voice & accountability and political governance. Second, with regard to economic governance: (i) only economic globalisation significantly promote regulation quality; (ii) social globalisation and general globalisation significantly advance government effectiveness and (iii) economic globalisation and general globalisation significantly promote economic governance. Third, as concerns institutional governance, whereas only social globalisation improves corruption-control, the effects of globalisation dynamics on the rule of law and institutional governance are not significant. Fourth, the impacts of social globalisation and general globalisation are positive on general governance. It follows that: (i) political governance is driven by voice and accountability compared to political stability; (ii) economic governance is promoted by both regulation quality and government effectiveness from specific globalisation angles and (iii) globalisation does not improve institutional governance for the most part. Theoretical contributions and policy implications are discussed.