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Economic growth through digitalization in Africa: does financial sector development play a mediating role?

Author

Listed:
  • Abdul Ganiyu Iddrisu
  • Bei Chen

Abstract

Purpose - This paper aims to analyse economic growth in Africa focussing on the role of digitalization and financial sector development. Design/methodology/approach - The authors employ country-level data from 36 African countries over the period 2000–2020 and used fixed effect, random effect and the Hausman–Taylor estimation techniques. Findings - The study, first finds that, digitalization propels financial sector development in Africa. Building on this, the study further finds that, digitalization conditioned on financial sector development at best does not promote economic growth in Africa. However, results of the net effects suggest that digitalization, overall, improve economic growth in Africa. Social implications - In the current environment of a sluggish global economy, digitalization can play an important role in assisting policymakers to spur economic growth. This has attracted the attention of many researchers in the developed world. However, little is done about the subject matter in Africa. Originality/value - The findings of this paper are novel in the African sub-region with important policy implications.

Suggested Citation

  • Abdul Ganiyu Iddrisu & Bei Chen, 2022. "Economic growth through digitalization in Africa: does financial sector development play a mediating role?," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 19(10), pages 3111-3138, December.
  • Handle: RePEc:eme:ijoemp:ijoem-02-2022-0278
    DOI: 10.1108/IJOEM-02-2022-0278
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    Citations

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    Cited by:

    1. Nourallah, Mustafa & Öhman, Peter & Hamati, Samer, 2024. "Financial technology and financial capability: Study of the European Union," Global Finance Journal, Elsevier, vol. 62(C).

    More about this item

    Keywords

    Digitalization; Economic growth; Financial sector development; Africa; F43; G2; L86; O55;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • G2 - Financial Economics - - Financial Institutions and Services
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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