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Innovation in Africa: Why Institutions Matter

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  • Stephen Oluwatobi
  • Uchenna Efobi
  • Isaiah Olurinola
  • Philip Alege

Abstract

Given the role that innovation plays as an engine for economic development, we examined the enabling factor of institutions in Africa. Particularly, attention was given to determining the equivalent effects of institutional development on innovation. A sample of 40 African countries over the period 1996-2012 was employed, and our baseline equation was estimated using the system generalised method of moments (SGMM) estimation technique. The empirical result reveals that government effectiveness and regulatory quality are two institutional measures that have the most equivalent impact on innovation. The extent of impact is an indication that institutions matter, especially when considering innovation in Africa. Therefore, to advance the rate of innovation in Africa, improving frameworks to drive regulations and enhance government effectiveness is a necessary instrument. Having these in place, Africa will be able to catch up with advanced economies.

Suggested Citation

  • Stephen Oluwatobi & Uchenna Efobi & Isaiah Olurinola & Philip Alege, 2015. "Innovation in Africa: Why Institutions Matter," South African Journal of Economics, Economic Society of South Africa, vol. 83(3), pages 390-410, September.
  • Handle: RePEc:bla:sajeco:v:83:y:2015:i:3:p:390-410
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    File URL: http://hdl.handle.net/10.1111/saje.12071
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    References listed on IDEAS

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    Cited by:

    1. Jeremiah O. Ejemeyovwi & Evans S. Osabuohien, 2018. "Investigating the relevance of mobile technology adoption on inclusive growth in West Africa," Working Papers of the African Governance and Development Institute. 18/028, African Governance and Development Institute..
    2. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2016. "The Mobile Phone in the Diffusion of Knowledge for Institutional Quality in Sub-Saharan Africa," World Development, Elsevier, vol. 86(C), pages 133-147.
    3. Simplice Asongu & Jacinta C. Nwachukwu, 2017. "Openness, ICT and Entrepreneurship in Sub-Saharan Africa," Working Papers of the African Governance and Development Institute. 17/032, African Governance and Development Institute..
    4. Asongu, Simplice & Nwachukwu, Jacinta, 2017. "The Role of Openness in the Effect of ICT on Governance," MPRA Paper 84344, University Library of Munich, Germany.
    5. Simplice Asongu & Ndemaze Asongu, 2017. "The role of mobile phones in governance-driven technology exports in Sub-Saharan Africa," Working Papers of the African Governance and Development Institute. 17/036, African Governance and Development Institute..
    6. Barasa, Laura & Knoben, Joris & Vermeulen, Patrick & Kimuyu, Peter & Kinyanjui, Bethuel, 2017. "Institutions, resources and innovation in East Africa: A firm level approach," Research Policy, Elsevier, vol. 46(1), pages 280-291.
    7. Simplice Asongu & Nicholas Odhiambo, 2018. "Governance and social media in African countries: an empirical investigation," Working Papers of the African Governance and Development Institute. 18/039, African Governance and Development Institute..
    8. repec:kap:jincot:v:17:y:2017:i:3:d:10.1007_s10842-016-0240-1 is not listed on IDEAS
    9. Simplice Asongu & Sara le Roux & Jacinta Nwachukwu & Chris Pyke, 2018. "The Mobile Phone as an Argument for Good Governance in Sub-Saharan Africa," Working Papers of the African Governance and Development Institute. 18/029, African Governance and Development Institute..
    10. Simplice Asongu & Vanessa Tchamyou & Ndemaze Asongu & Nina Tchamyou, 2019. "Fighting terrorism in Africa: evidence from bundling and unbundling institutions," Empirical Economics, Springer, vol. 56(3), pages 883-933, March.
    11. repec:gam:jsusta:v:11:y:2018:i:1:p:63-:d:192654 is not listed on IDEAS
    12. Simplice Asongu & Jacinta C. Nwachukwu, 2016. "Mobile Phones in the Diffusion of Knowledge and Persistence in Inclusive Human Development in Sub-Saharan Africa," Working Papers of the African Governance and Development Institute. 16/009, African Governance and Development Institute..
    13. Simplice A. Asongu & Nicholas Biekpe, 2017. "Government quality determinants of ICT adoption in sub-Saharan Africa," Netnomics, Springer, vol. 18(2), pages 107-130, December.
    14. Asongu, Simplice A & Nwachukwu, Jacinta C., 2015. "Foreign aid instability and bundled governance dynamics in Africa," MPRA Paper 71783, University Library of Munich, Germany.
    15. Jeremiah O. Ejemeyovwi & Evans S. Osabuohien, 2018. "Investigating the relevance of mobile technology adoption on inclusive growth in West Africa," AFEA Working Papers 18/023, African Finance and Economic Association (AFEA).
    16. Asongu, Simplice A & Odhiambo, Nicholas M, 2019. "Governance,CO2 emissions and inclusive human development in Sub-Saharan Africa," Working Papers 25253, University of South Africa, Department of Economics.
    17. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2016. "The role of governance in mobile phones for inclusive human development in Sub-Saharan Africa," Technovation, Elsevier, vol. 55, pages 1-13.
    18. Simplice Asongu & Enowbi Batuo & Vanessa Tchamyou, 2015. "Bundling Governance: Finance versus Institutions in Private Investment Promotion," Working Papers of the African Governance and Development Institute. 15/051, African Governance and Development Institute..
    19. repec:eee:tefoso:v:131:y:2018:i:c:p:183-203 is not listed on IDEAS
    20. Asongu, Simplice A & Odhiambo, Nicholas M, 2019. "Inclusive development in enviromental sustainability in Sub-Saharan Africa: Insights from governance mechanisms," Working Papers 25226, University of South Africa, Department of Economics.
    21. Asongu, Simplice A. & Nwachukwu, Jacinta C. & Orim, Stella-Maris I., 2018. "Mobile phones, institutional quality and entrepreneurship in Sub-Saharan Africa," Technological Forecasting and Social Change, Elsevier, vol. 131(C), pages 183-203.
    22. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "Fighting Capital Flight in Africa: Evidence from Bundling and Unbundling Governance," Journal of Industry, Competition and Trade, Springer, vol. 17(3), pages 305-323, September.

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