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Assessing the Impact of Ease of Doing Business and Corruption on Economic Growth for Africa Free Trade Zone (AFTZ) Member States

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  • Bonga, Wellington G.
  • Mahuni, Kenneth

Abstract

A positive economic growth is one crucial macroeconomic objective of every nation. Many countries have formed regional as well as international trading blocs in an attempt to enhance economic growth and maximise welfare of each member state, the AFTZ member states are not an exception. This paper seeks to investigate the impact of ease of doing business and corruption on economic growth of AFTZ member states. The study employed a panel data analysis for the period 2010-2016, using Stata Statistical Software. The study findings for the bloc, indicated that corruption, trading across borders, getting credit, registration of property, dealing with construction permits, and starting business have a significant impact on the bloc’s economic growth; with insolvency resolving and investor protection of concern as well. Paying attention to country effects test, with the quest for efficient results, the study further divided the AFTZ bloc into 3 groups using average GDP as the determining variable. The usual 3 panel models were run for each group, with efficiency noted from the reported adjusted R-squared and overall R-squared. The study recommends each member state to pay particular attention to the identified affecting variables for improved economic growth. The onus to improve economic wellbeing of each state does not lie on the bloc only but on individual efforts as well, since individual differences prevail. All this will enable the broader efficacy and vision of AFTZ to be realised.

Suggested Citation

  • Bonga, Wellington G. & Mahuni, Kenneth, 2018. "Assessing the Impact of Ease of Doing Business and Corruption on Economic Growth for Africa Free Trade Zone (AFTZ) Member States," MPRA Paper 88932, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:88932
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    References listed on IDEAS

    as
    1. Haidar, Jamal Ibrahim, 2012. "The impact of business regulatory reforms on economic growth," Journal of the Japanese and International Economies, Elsevier, vol. 26(3), pages 285-307.
    2. World Bank & International Finance Corporation, "undated". "Doing Business in the Arab World 2012," World Bank Publications - Reports 26907, The World Bank Group.
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    Cited by:

    1. Nur Hayati Abd Rahman & Shafinar Ismail & Eeng Ahman & Aas Nurasyiah & Neni Sri Wulandari, 2021. "The effect of regulatory performance on economic growth," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(3), pages 604-617, March.
    2. Nageri Kamaldeen Ibraheem & Gunu Umar, 2020. "Corruption and Ease of Doing Business: Evidence from ECOWAS," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 8(1), pages 19-37, October.
    3. Rafiou Raphaël Bétila, 2021. "The impact of Ease of Doing Business on economic growth: a dynamic panel analysis for African countries," SN Business & Economics, Springer, vol. 1(10), pages 1-34, October.
    4. Victor Ushahemba Ijirshar & Joshua Kpelai Nomkuha & Benjamin Bem Bura & Joseph Tarza Sokpo & Mlumun Queen Ijirshar, 2023. "Ease of doing business and investment among West African countries," African Development Review, African Development Bank, vol. 35(2), pages 97-112, June.

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    More about this item

    Keywords

    Economic Growth; Ease of Doing Business; Doing Business Indicators; Corruption; AFTZ; Panel Data Analysis;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F15 - International Economics - - Trade - - - Economic Integration
    • F18 - International Economics - - Trade - - - Trade and Environment
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • N47 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Africa; Oceania
    • N97 - Economic History - - Regional and Urban History - - - Africa; Oceania
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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