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The Determinants of Economic Growth in Africa: A Dynamic Causality and Panel Cointegration Analysis

Author

Listed:
  • Sharif Hossain

    (Department of Accounting and Information Systems, Faculty of Business Studies, University of Dhaka, Dhaka 1000, Bangladesh)

  • Rajarshi Mitra

    (Faculty of Economics 305, Kyushu University, 6-19-1 Hakozaki, Higashi-ku, Fukuoka-shi 812-8581, Japan)

Abstract

This paper examines the dynamic causal relationships between trade openness, foreign aid, domestic investment, long-term external debt, government spending and economic growth for a panel of 33 highly aid-dependent African countries for the period 1974- 2009. Short-run bidirectional causality is found between economic growth and trade openness. Short-run unidirectional causalities are found from external debt to foreign aid, from trade openness, foreign aid, external debt to domestic investment, from economic growth, trade openness to external debt and also from trade openness to government spending. The long-run effects of trade openness, domestic investment and government spending on economic growth are significantly positive.

Suggested Citation

  • Sharif Hossain & Rajarshi Mitra, 2013. "The Determinants of Economic Growth in Africa: A Dynamic Causality and Panel Cointegration Analysis," Economic Analysis and Policy, Elsevier, vol. 43(2), pages 217-226, September.
    • Handle: RePEc:eee:ecanpo:v:43:y:2013:i:2:p:217-226
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    Citations

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    Cited by:

    1. Ogundari, Kolawole & Awokuse, Titus, 2018. "Human capital contribution to economic growth in Sub-Saharan Africa: Does health status matter more than education?," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 131-140.
    2. Ozlem Ayvaz Kizilgol & Evren Ipek, 2014. "An Empirical Evaluation of the Relationship between Trade Openness and External Debt: Turkish Case," International Econometric Review (IER), Econometric Research Association, vol. 6(1), pages 42-58, April.
    3. Emrah İ. Çevik & Erdal Atukeren & Turhan Korkmaz, 2019. "Trade Openness and Economic Growth in Turkey: A Rolling Frequency Domain Analysis," Economies, MDPI, vol. 7(2), pages 1-16, May.
    4. Fanglei Wang & Jianbo Gao & Feiyan Liu, 2024. "Unlocking Africa’s development potential: insights from the perspective of global hierarchy and competition," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-17, December.
    5. Sultana, Tanzila & Dey, Sima Rani & Tareque, Mohammad, 2022. "Exploring the linkage between human capital and economic growth: A look at 141 developing and developed countries," Economic Systems, Elsevier, vol. 46(3).
    6. Brian Muyambiri & John-Baptiste Mabejane, 2023. "The Nexus Of External Debt, Private Investment And Financial Development: Evidence From Selected Sacu Countries," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 21(1), pages 25-40, May.
    7. Eléazar Zerbo, 2015. "What determines the long-run growth in Sub-Saharan Africa? Exploring the role of energy, trade openness and financial development in six countries," Working Papers hal-01238524, HAL.

    More about this item

    Keywords

    Unit Root Test; Panel Cointegration; Granger Causality;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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