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Estimating the effect of economic globalization on welfare in Africa

Author

Listed:
  • Samuel Tawiah Baidoo

    (Kwame Nkrumah University of Science and Technology)

  • Daniel Sakyi

    (Kwame Nkrumah University of Science and Technology)

  • Enock Kojo Ayesu

    (Kwame Nkrumah University of Science and Technology)

  • Grace Nkansa Asante

    (Kwame Nkrumah University of Science and Technology)

  • John Bosco Dramani

    (Kwame Nkrumah University of Science and Technology)

Abstract

This paper estimates the effect of economic globalization on welfare in Africa. A panel data on 44 African countries spanning the period 1996–2017 is utilized and the two-step system generalized method of moments is employed for the analysis. The results reveal that economic globalization enhances welfare in Africa. The results further show support for the compensation hypothesis which states that economic globalization increases government expenditure, and hence improvement in welfare. The implication of the findings is that economic globalization is good for African countries. Therefore, on the policy front, there is the need for African countries to explore such economic openness (economic globalization) to their advantage, but with caution—ensuring that trade agreements, policies such as tariffs and taxes are not compromized. This will ensure that African countries obtain the full benefits associated with economic globalization.

Suggested Citation

  • Samuel Tawiah Baidoo & Daniel Sakyi & Enock Kojo Ayesu & Grace Nkansa Asante & John Bosco Dramani, 2023. "Estimating the effect of economic globalization on welfare in Africa," SN Business & Economics, Springer, vol. 3(9), pages 1-25, September.
    • Handle: RePEc:spr:snbeco:v:3:y:2023:i:9:d:10.1007_s43546-023-00543-z
    DOI: 10.1007/s43546-023-00543-z
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    More about this item

    Keywords

    Economic globalization; Trade globalization; Financial globalization; Welfare;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F15 - International Economics - - Trade - - - Economic Integration
    • F60 - International Economics - - Economic Impacts of Globalization - - - General

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