New Business Creation and Intersectoral Linkages in Sub-Saharan Africa

Saara L. M. Hamunye and Michael Graham ()
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Michael Graham: Stellenbosch Business School, University of Stellenbosch, Cape Town, South Africa

The African Finance Journal, 2025, vol. 27, issue 1, 32-52

Abstract: This paper explores sectoral linkages and their impact on economic growth and new business creation in Sub-Saharan Africa (SSA). Utilising an input-output analysis framework and a cross-country model, this analysis examines panel data from SSA to determine how sectoral linkages influence business dynamics. The findings identify seven sectors with strong backward and forward linkages: agriculture, wood and paper, petroleum, chemical and non-mineral products, metal products, electrical machinery, wholesale trade, and financial intermediation and business activities. Notably, agriculture and petroleum, chemical and non-mineral products are found to significantly enhance economic growth, while financial intermediation and business activities drive entrepreneurship and business formation. The results underscore the importance of targeted policy interventions, particularly in promoting financial sector reforms to support agricultural development and thereby stimulate economic growth and development

Keywords: Business Creation; Economic Growth; Sub-Saharan Africa; Sectoral Linkages; Unbalanced Growth Theory (search for similar items in EconPapers)
JEL-codes: F63 L51 M13 O11 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:afj:journl:v:27:y:2025:i:1:p:32-52

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