The determinants of economic growth evidence from a panel of chinese provinces yanrui wu a recent resurgence of interest in economic growth has led to blossoming literature. An empirical study on the determinants of trade openness in the african economies, advances in management and applied economics, scienpress ltd, vol. Determinants of the evolution of inequality in africa. The main objective of this study is to examine the major macroeconomic determinants of economic growth in ghana between the periods 1970 and 2011 applying the johansen method of cointegration. The fundamental component alongside the growth of factors as determinants of growth is technical progress. This paper therefore provides an empirical analysis of the relationship between inclusive growth and its determinants as studies in this area are. Slowgrowth and highgrowth economies from 1965 to 1995 table 1 applies to lowgrowth countries, the 20 with the lowest per capita growth rates from 1965 to 1995. The views expressed here are those of the author and not those of the african development bank group, its board of directors or the countries they represent. The determinants of manufacturing, page 1 the determinants of manufacturing sector growth in subsaharan african countries raufu o. These are amongst vital elements for innovation and enhanced productivity. It reveals that in developing countries the key macroeconomic determinants of economic growth include foreign aid, foreign direct investment, fiscal policy, investment, trade, human capital development, demographics, monetary policy, natural resources, reforms and geographic, regional, political and financial factors. Numerous potential growth determinants have been identi. The determinants of stock market development in emerging.
Cosatu remarks that the neoliberal approach to economic growth, with its fixated focus on fiscal discipline, cannot be appropriate for african. Using the framework of endogenous growth models which seeks to explain sustained long term growth across countries and over time as a basis, this paper empirically analyses the determinants of long term growth. During the eighties growth slowed down significantly in south africa. Determinants of economic growth in a panel of countries. The primary purpose of this study therefore is to establish the determinants of human capital formation, economic growth and development of the african countries studied. According to a recent report by the international energy agency, around 70% of the population in subsaharan africa live without electricity. A new look at the determinants of growth in asian countries. The east and south african economies and their ict infrastructure overview of east and south african economies although the south african economy as a whole is far more advanced than the economies of the east african countries in some respects they face similar problems.
Conmmodity prices and growth in africa angus deaton a frican economies export primary commodities, and most export little else. This study assesses growth determinants in the brazil, russia, india, china, and south africa and mexico, indonesia, nigeria, and turkey nations the period 2001. Subsaharan african countries have a long history of reliance on trade with europe and north. Also, most of the typically scanty empirical attempts have been, in the main, conducted at the crosscountry levels, thus, making it quite difficult to extrapolating to countryspecific cases. South africas human opportunities, 2015 28 figure 2.
Conceivably, the divergent economic outcomes between subsaharan african countries and emerging market. To boost trade openness, this paper conducts an examination of the determinants of trade openness in the african countries. However, there are also some other indirect factors, which affect the causal relationship between exports and economic growth. Pdf introduction to determinants of economic growth in africa and summary. Sixty years later, in 2011, the developed world had only 19 percent of the global population and about 44 percent of global income. Economic diversification is vital to longterm economic growth. We examine some determinants of growth in egypt since the mid1980s using insights from both standard econometric techniques and a diagnostic approach proposed by hausmann, rodrik and velasco 2004. In this equilibrium, slow growth and high inequality reinforce each. Over the past decade, most emerging and transition economies are experiencing fast growth, which is above the world average, and a consistent institutional change. The determinants of manufacturing sector growth in sub. A dynamic causality and panel cointegration analysis sharif hossain, md. However, the empirical significance of exchange rate policy in macroeconomic performance remains an open question, with ghosh, gulde, and wolf. The countries are arranged in ascending order of growth rates, as shown in column 2.
Obiora university of ibadan, may 1, 2006 abstract although the theory of diminishing returns to capital postulates that capital should be. As such, growth in one sector of the economy does not automatically translate into equal benefits for the populace. Barro growth rates vary enormously across countries over long periods of time. Determinants of economic growth in a panel of countries robert j. This volume is a collection of selected empirical studies on determinants of economic growth in africa. Ajide1 this paper investigates the role of frazer economic freedom index on fdigrowth relationship over the period spanning 1980 through 2010 using annual time series data. First of all, a crosscountry analysis of a group of emerging and transition economies in the period 19992005 will be carried out in order to understand what. Conmmodity prices and growth in africa princeton university. An empirical study on the determinants of trade openness in.
Introduction discussions of economic growth usually focus on differences in growth performance. Determinants of economic growth in nigeria kazeem b. The determinants of trade between world emerging and african. The policies, which affect the level of growth and the investment efficiency determine the longrun economic growth. Particular emphasis is laid on the bundling and unbundling of ten governance dynamics. Determinants and impact of ict use for african smes. Trade openness for the african countries presents an avenue for gaining new knowledge, ideas and capital. Bulletin of the transilvania university of brasov series v. The rapid growth of the 1960s is typically contrasted with the slowdown of the 1970s and 1980s. A well performing industrial sector plays an important role in poverty mitigation, unemployment reduction, trade promotion, exchange of goods and services, increased per capital income and gdp growth etc. Factors affecting economic growth in africa wiley online library.
Certainly, since exports consist one of the main determinants of economic growth, an increase of exports contributes to an increase of economic growth. Using the framework of endogenous growth models which seeks to explain sustained long term growth across countries and over time as a basis, this paper empirically analyses the determinants of long term growth in selected african countries during 197091. Determinants of foreign direct investment and economic growth in the west african monetary zone. Sokunle jp morgan chase alan harper gwynedd mercy university abstract a robust manufacturing sector is the engine of growth in both developed and developing economies. This process of increasing interdependence of world economies, most notably illustrated by the scale of financial flows and movements of goods and services now termed globalization, has been facilitated by research and. Obiora university of ibadan, may 1, 2006 abstract although the theory of diminishing returns to. There is still not a consensus on the key determinants of growth and an allencompassing model that includes all the influences has not yet been elaborated. A multivariate regression approach was employed to estimate augmented growth models. This study investigates the key determinants of trade between african emerging economies and world major emerging economies by using the gravity model of international trade.
Numerous studies have investigated the institutional financial performance and their outcomes for emerging states predominantly in perspective of south asian and african economies. Third, it identifies potential economic growth determinants through an econometric model that uses panel data after examining all the observable variables. Determinants of economic growth in africa springerlink. Growth projections for south africa and other emdes 21 figure 2. Master of commerce in development finance degree by. Determinants of economic growth panel data approach. Introduction economic growth theories and models highlight the different ways in which the. Determinants of foreign direct investment in developing. Numerous studies have been carried out to find the longrun growth path. The reason for these variations is a central issue for economic policy, and crosscountry empirical work on this topic has been popular since the early 1990s. Growth theories highlight the evolution and trends in economic thought that shaped the way economic growth is perceived. Determinants of foreign direct investment and economic. Grouped into three parts, chapters examine the influence of financial sources and economic growth. The environmental kuznets curve ekc hypothesis claims that an inverted ushaped relationship exists between income per capita and emissions environmental pressure.
Determinants of foreign direct investment in developing countries asarc wp 2010 5 2. Work within this framework highlighted three significant sources of growth. The determinants of economic growth in central african republic, international journal of economic behavior and organization. Working paper 6 determinants of foreign direct investment. The author has not forgotten the empirical literature while developing the different determinants of economic.
We find that trends in government consumption, credit to the private sector and the average growth rate of oecd countries have been significant. Determinants of human capital formation and economic. The empirical literature on growth is vast with key papers mankiw, romer and weil, 1992 and levine and renelt, 1992 finding investment, education and population growth as the main determinants of growth. Determinants of economic growth in africa almas heshmati. Since world war ii, the trend growth of real gdp has become a key policy objective in almost all countries see crafts 2000. Determinants of economic growth in developing economies. Determinants, characteristics and implications for economic growth and poverty alleviation executive summary introduction this paper presents the findings of a study analysing the major factors determining the form and volume of private foreign direct investment in southern africa. In most african countries, access to electricity is very low due to high cost, which creates low competitiveness in the industrial sector and eventually leads to energy poverty and hindered economic growth. This paper studies the macroeconomic and institutional determinants of stock market development in emerging economies using a panel dataset of 42 countries for the period 1990 to 2004. Ricardo in his study in 1817, notes that trade facilitates products output with a.
Vibrant economies usually generate a large share of their gdp in the manufacturing and service sectors. Pdf the determinants of growth in the south african. In examining these factors for the african countries. Ofodile, trinity college, class of 2001, graduated in may, 2001 with a bs in economics, a minor in political science, and a markets and management certificate. This book presents a collection of selected empirical studies exploring the determinants of economic growth in africa.
The paper applies this approach to identify the determinants of economic growth in ghana, as a case study of a fastgrowing subsaharan african economies. The structural patterns of most economies in subsaharan africa have remained static, and most countries continue to operate far below the global technology frontiers. However east african countries have the challenge of raising their economic growth rates and eventually translating it to lower unemployment and poverty levels. The latter includes brics countries plus turkey, mexico, and the philippines while the earlier includes 15 african economies. Unlike in previous studies, however, the relation is not linear, confirming the fragility of the links between trade openness and economic. Numerous studies have investigated the institutional financial performance and their outcomes for emerging states predominantly in perspective of south. It is not generally true that south africas infrastructure is inappropriate for its level of economic development, but viewed as a determinant of growth, there may be infrastructure inadequacies that are binding constraints on economic growth. Specifically, the paper examines the impact of domestic savings, investment, stock.
Determinants of human capital formation and economic growth. These findings suggest that the openness of african economies to international trade should be associated with growth, which is in line with other empirical works ismail et al. Determinants of globalization and growth prospects for subsaharan african countries share page. An empirical study on the determinants of trade openness. Oct 25, 2018 a well performing industrial sector plays an important role in poverty mitigation, unemployment reduction, trade promotion, exchange of goods and services, increased per capital income and gdp growth etc. Reducing asset inequality is a challenge, as it concerns the stock of wealth rather than the flow of income. Determinants of foreign direct investment and economic growth. Policymakers as well as economists and historians of african economic development have seen these exports as both a hope and a curse. The determinants of economic growth in central african.
The determinants of economic growth in emerging economies. We therefore investigate the determinants of economic growth in africa north and sub saharan. Determinants of energy demand in african frontier market. Determinants of foreign direct investment inflows to africa, 19802007 john c. It is with this regard that this research entailed investigating the major determinants of economic growth for kenya, tanzania, uganda, rwanda and burundi. The purpose of this paper is to identify the set of variables that may potentially act as determinants of growth in the south african economy with the application of the cointegrated vector. The six largest economies in the region by gdp size are nigeria, south africa, angola, sudan, kenya and ethiopia, which collectively account for approximately 70% of the regions gdp. There are many determinants and consequences of economic growth the level of infrastructure being one. The determinants of longrun growth steve dowrick 1. New growth theories stress the importance of investments, human and physical capital in the longrun economic growth. The determinants of trade between world emerging and. Determinants of economic growth in subsaharan africa munich. Determinants of globalization and growth prospects for sub.
We contrast the super growth of asia with the sluggish growth of the european. The fdi and economic growth controversy in subsaharan africa. Anyanwu is a lead research economist, development research department, african development bank j. Determinants of economic growth in subsaharan africa. The study is on macroeconomic determinants of economic growth in ghana using cointegration approach.
But that investigation is complicated by the fact that country experiences with growth are enormously varied and often confusing. Pdf fdi and fpi determinants in developing african countries. Dec 28, 2005 we examine some determinants of growth in egypt since the mid1980s using insights from both standard econometric techniques and a diagnostic approach proposed by hausmann, rodrik and velasco 2004. Nigeria is one of the fastest growing economies in the world, yet ranked 152 nd out of 188 countries of the world 1. Lead research economist, development research department, african development bank, bp 323, 1002 tunis belvedere, tunis, tunisia. The case of african countries adora ofodile1 duke university durham, nc april, 2001 1 adora c. Sep 16, 2014 lead research economist, development research department, african development bank, bp 323, 1002 tunis belvedere, tunis, tunisia.
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