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Catalysts of Economic Welfare in Africa: A Cross-Sectional Autoregressive Distributed Lag Approach

Author

Listed:
  • Kuti Ayomide Oluwafunmisho

    (Department of Economics, Olabisi Onabanjo University, Nigeria)

  • Aderogba Taiwo Adebusuyi

    (Department of Economics, Olabisi Onabanjo University, Nigeria)

  • Ezenwa Ndubuisi Johnbosco

    (Alex Ekwueme Federal University, Nigeria)

  • Quadri Rasheed Adegboyega

    (Poznań University of Life Sciences, Poland)

Abstract

This study provides empirical perspectives on the catalysts of economic welfare in Africa, drawing inference from macroeconomic and non-macroeconomic factors. Leveraging a sample of a balanced panel dataset of 35 countries across Africa, this study provides novel applications of the cross-sectional autoregressive distributed lag methodology to economic welfare analysis in Africa. Issues of cross-sectional dependence and slope homogeneity were accounted for whilst establishing causal relationships between economic welfare proxied by the Human Development Index and macroeconomic and non-macroeconomic drivers of welfare. Based on cross-sectional autoregressive distributed lag estimation results, a 1% increase in economic growth was shown to account for a 0.233 percent and 0.253 percent increase in economic welfare in the long run and short run respectively. In addition, technology accounted for a 1.81 percent increase in economic welfare in the long run. The outcome of the Dumitrescu–Hurlin causality test demonstrated causality between trade openness, government effectiveness, economic growth, and economic welfare.

Suggested Citation

  • Kuti Ayomide Oluwafunmisho & Aderogba Taiwo Adebusuyi & Ezenwa Ndubuisi Johnbosco & Quadri Rasheed Adegboyega, 2023. "Catalysts of Economic Welfare in Africa: A Cross-Sectional Autoregressive Distributed Lag Approach," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 11(1), pages 18-41, October.
    • Handle: RePEc:vrs:auseab:v:11:y:2023:i:1:p:18-41:n:10
    DOI: 10.2478/auseb-2023-0002
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    More about this item

    Keywords

    Africa; CS-ARDL; Human Development Index; economic welfare; poverty;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • D60 - Microeconomics - - Welfare Economics - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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