Impact of Geoeconomic Fragmentation on Macroeconomic Performance in West Africa: The Moderating Role of Governance

Ayodele F. Oshodi, Abdulhakeem A. Kilishi and Akinsoto B. Omoniyi

African Journal of Economic Review, 2024, vol. 12, issue 4

Abstract: Many studies projected that the consequences of geoeconomic fragmentation would vary across regions and will be more severe in developing countries particularly those that are more dependent on commodity trade, it is therefore imperative to carry out a regional-specific study. Hence, this study investigates the partial effects of six fragmentation measures on economic performance in the West African Sub-region. The study further examines the total impact of fragmentation while accounting for the moderating influence of governance indicators. Panel data from fourteen West African countries from 1991 to 2022 were analysed using fixed effect within and random effect GLS estimators, while the preferred method was chosen using the Hausman specification test. The results show that all the forms of fragmentation in terms of trade restrictions are harmful to the economic performance of West African countries, with exchange and export restrictions having the largest consequences. However, improvement in governance reduces the negative effects of fragmentation. Particularly, improvement in control of corruption, government effectiveness, regulatory quality, and the rule of law can moderate the impact of fragmentation. It is recommended that efforts should be intensified to improve the quality of governance in West Africa countries to mitigate the negative consequences of the growing trend of fragmentation due to rising geopolitical tensions across the globe.

Keywords: Political; Economy (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/362926/files/a ... 20_674aef3f46c7b.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:afjecr:362926

DOI: 10.22004/ag.econ.362926

Access Statistics for this article

More articles in African Journal of Economic Review from African Journal of Economic Review
Bibliographic data for series maintained by AgEcon Search ().