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Is financial development shaping or shaking economic sophistication in African countries?

Author

Listed:
  • Henri Njangang

    (University of Dschang , Cameroon)

  • Simplice A. Asongu

    (Yaoundé, Cameroon)

  • Sosson Tadadjeu

    (University of Dschang , Cameroon)

  • Yann Nounamo

    (University of Douala, Douala, Cameroon)

Abstract
This paper aims to investigate the effect of financial development on economic complexity using a panel dataset of 24 African countries over the period 1983-2017. The empirical evidence is based on two different approaches. First, we adopt the Hoechle (2007) procedure which produces Driscoll-Kraay standard errors to account for heteroscedasticity and cross–sectional dependence. Second, we implement the system Generalized Method of Moments to account for endogeneity. The results show that financial development increases economic complexity in Africa. Looking at the regional difference, the results show that this effect is less beneficial for SSA countries.

Suggested Citation

  • Henri Njangang & Simplice A. Asongu & Sosson Tadadjeu & Yann Nounamo, 2021. "Is financial development shaping or shaking economic sophistication in African countries?," Working Papers of the African Governance and Development Institute. 21/018, African Governance and Development Institute..
    • Handle: RePEc:agd:wpaper:21/018
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    References listed on IDEAS

    as
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    Cited by:

    1. Kamguia, Brice & Tadadjeu, Sosson & Miamo, Clovis & Njangang, Henri, 2022. "Does foreign aid impede economic complexity in developing countries?," International Economics, Elsevier, vol. 169(C), pages 71-88.
    2. Henri Njangang & Youssouf Nvuh-Njoya, 2023. "Unravelling the link between democracy and economic complexity: fresh evidence from the Varieties of Democracy data," SN Business & Economics, Springer, vol. 3(3), pages 1-32, March.
    3. Stéphane Mbiankeu Nguea & Hervé Kaffo Fotio & Louise Angèle Baida, 2022. "Investigating the effects of globalization on economic sophistication in selected African countries," African Development Review, African Development Bank, vol. 34(3), pages 324-338, September.
    4. Honoré Tekam Oumbé & Ronald Djeunankan & Alain Mekia Ndzana, 2023. "Does information and communication technologies affect economic complexity?," SN Business & Economics, Springer, vol. 3(4), pages 1-25, April.

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    More about this item

    Keywords

    Financial development; Economic complexity; Panel data analysis; Africa;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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