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The Comparative Economics of Catch-up in Output per Worker, Total Factor Productivity and Technological Gain in Sub-Saharan Africa

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  • John Ssozi
  • Simplice A. Asongu

Abstract

type="main" xml:lang="en"> Using the two-step system general method of moments panel data analysis we first investigate the effects of external financial flows on total factor productivity and technological gain, and then use the beta catch-up and sigma convergence to compare dispersions in output per worker, total factor productivity and technological gain in sub-Saharan Africa (SSA) for the years 1980–2010. The comparative evidence is articulated with income levels, years of schooling, and health factors. We find; first, a positive association between foreign direct investment, trade openness, foreign aid, remittances and total factor productivity. However, when foreign direct investment is interacted with schooling, its direct effect becomes negative on total factor productivity. Second, beta catch-up is between 19.22 percent and 19.70 percent per annum with corresponding time to full catch-up of 25.38 years and 26.01 years respectively. Third, we find sigma-convergence among low-income nations and upper-middle income nations separately, but not for the entire sample together. Fourth, schooling in SSA is not yet a significant source of technology, but it can make external financial inflows more effective. Policies to induce external financial flows are not enough for development if absorptive capacity is low.

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  • John Ssozi & Simplice A. Asongu, 2016. "The Comparative Economics of Catch-up in Output per Worker, Total Factor Productivity and Technological Gain in Sub-Saharan Africa," African Development Review, African Development Bank, vol. 28(2), pages 215-228, June.
  • Handle: RePEc:bla:afrdev:v:28:y:2016:i:2:p:215-228
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    Cited by:

    1. Asongu, Simplice & Biekpe, Nicholas & Tchamyou, Vanessa, 2018. "Remittances, ICT and Doing Business in Sub-Saharan Africa," MPRA Paper 88513, University Library of Munich, Germany.
    2. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "The Arab Spring was Predictable in 2007: Empirics of Proof," Africagrowth Agenda, Africagrowth Institute, vol. 14(4), pages 4-7.
    3. Simplice A. Asongu & Jacinta C. Nwachukwu & Chris Pyke, 2018. "The Comparative Economics of ICT, Environmental Degradation and Inclusive Human Development in Sub-Saharan Africa," AFEA Working Papers 18/031, African Finance and Economic Association (AFEA).
    4. Maha Kalai & Kamel Helali, 2016. "Technical Change and Total Factor Productivity Growth in the Tunisian Manufacturing Industry: A Malmquist Index Approach," African Development Review, African Development Bank, vol. 28(3), pages 344-356, September.
    5. Efobi, Uchenna & Asongu, Simplice & Okafor, Chinelo & Tchamyou, Vanessa & Tanankem, Belmondo, 2016. "Diaspora Remittance Inflow, Financial Development and the Industrialisation of Africa," MPRA Paper 76121, University Library of Munich, Germany.

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    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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