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Explaining Growth in African Countries – What Matters?

Author

Listed:
  • José Augusto Lopes Da Veiga

    (Universidade do Mindelo, Management and Economics Department, Mindelo, Cabo Verde, Portugal)

  • Alexandra Ferreira-Lopes

    (Instituto Universitário de Lisboa, ISCTE Business School Economics Department, Business Research Unit, Lisboa, Portugal, and CEFAGE-UBI)

  • Tiago Neves Sequeira

    (Faculdade de Economia, Universidade de Coimbra)

  • Marcelo Serra Santos

    (Faculdade de Economia, Universidade de Coimbra)

Abstract

In this paper we analyse the role of the traditional determinants of economic growth in the African countries in the period between 1950 and 2012. Due to the specificity and the single nature of each one of these countries, methods that take into account observed and unobserved heterogeneity are used. Results highlight the relevance of the growth rate of the capital stock to growth in the short-run, which is significant in all regressions. The growth rate of the government to GDP ratio is also important in all but one of the regressions in which it appears, and its growth is harmful for the growth of GDP per capita in the short-run. The variables related to public debt do not present any relationship with economic growth. Human capital has a positive relationship with economic growth in regressions that do not include public debt. The growth rate of real GDP per capita also depends (negatively) on its past value, i.e., the lower the real GDP per capita the higher will be its growth rate.

Suggested Citation

  • José Augusto Lopes Da Veiga & Alexandra Ferreira-Lopes & Tiago Neves Sequeira & Marcelo Serra Santos, 2019. "Explaining Growth in African Countries – What Matters?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 69(3), pages 467-484, September.
    • Handle: RePEc:aka:aoecon:v:69:y:2019:i:3:p:467-484
    Note: Alexandra Ferreira-Lopes and Tiago Neves Sequeira would like to thank the Portuguese National Science Foundation (FCT) and FEDER/COMPETE for funding, through projects UID/GES/00315/2013 and UID/ECO/04007/2013 (POCI-01-0145-FEDER-007659). The authors would also like to thank two anonymous referees for very useful suggestions. The usual disclaimer applies.
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    More about this item

    Keywords

    economic growth; African countries; investment and capital stock; human capital; fiscal variables; observed and non-observed heterogeneity;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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