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Economic globalisation and Africa's quest for greener and more inclusive growth: The missing link

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  • Ofori, Isaac K.
  • Freytag, Andreas
  • Asongu, Simplice A.

Abstract

This study examines the contingency and threshold effects of economic freedom in the economic globalisation (EG) and inclusive green growth (IGG) relationship. To this end, we apply the fixed-effects generalized method of moments with Driscoll-Kraay standard errors estimator to macro data for the period 2008–2020 for 22 selected African countries. The following findings are established. First, we find that economic freedom reduces the negative effect of EG on IGG. Second, when we disaggregate EG into financial and trade globalisation, we show that the moderating effect of economic freedom on the former is rather striking. Third, our threshold analysis suggests that by improving Africa's unfree economic architecture to 60% (moderately free), the IGG-deteriorating marginal effects of EG are significantly mitigated (but not nullified). We conclude that unless an effort is made to improve economic freedom in Africa, the envisaged IGG gains of economic globalisation might prove elusive.

Suggested Citation

  • Ofori, Isaac K. & Freytag, Andreas & Asongu, Simplice A., 2024. "Economic globalisation and Africa's quest for greener and more inclusive growth: The missing link," International Economics, Elsevier, vol. 178(C).
    • Handle: RePEc:eee:inteco:v:178:y:2024:i:c:s2110701724000325
    DOI: 10.1016/j.inteco.2024.100509
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    1. Ofori, Isaac K. & Gbolonyo, Emmanuel Y. & Ojong, Nathanael Ojong, 2024. "Inclusive Green Growth Dataset for African Countries," MPRA Paper 121317, University Library of Munich, Germany, revised 26 Jun 2024.
    2. Dossou, Toyo Amègnonna Marcel & Ndomandji Kambaye, Emmanuelle & Asongu, Simplice A. & Alinsato, Alastaire Sèna & Berhe, Mesfin Welderufael & Dossou, Kouessi Pascal, 2023. "Foreign direct investment and renewable energy development in sub-saharan Africa: Does governance quality matter?," Renewable Energy, Elsevier, vol. 219(P1).

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    More about this item

    Keywords

    Africa; Economic freedom; Economic globalisation; Inclusive green growth;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • O56 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Oceania
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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