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Effect of credit supply constraint on labour productivity in Sub-Saharan Africa

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  • Kwame Acheampong

Abstract

This paper investigates the effect of credit supply constraint of risk on labour productivity in 33 Sub-Saharan Africa (SSA) countries spanning 1990-2013. It estimates the long run effect of credit supply constraints on labour productivity using the pooled mean group (PMG) estimator. The results revealed that a reduction in both actual and expected risk premiums increased labour productivity in SSA. The findings suggest that in order to relax the credit supply constraints with the intent to improving labour productivity, domestic interest rate should account for changes in foreign interest rate to enhance the needed capital inflows.

Suggested Citation

  • Kwame Acheampong, 2019. "Effect of credit supply constraint on labour productivity in Sub-Saharan Africa," African Journal of Economic and Sustainable Development, Inderscience Enterprises Ltd, vol. 7(2), pages 161-184.
    • Handle: RePEc:ids:ajesde:v:7:y:2019:i:2:p:161-184
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