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The Impacts of Economic Freedom and Institutional Quality on Migration from African Countries

Tadesse Gignarta, ZhenZhong Guan and Dinkneh Gebre Borojo

South African Journal of Economics, 2020, vol. 88, issue 3, 242-266

Abstract: The previous empirical literature suggests that socio‐economic conditions and demographic pressures are triggering factors of migration from Africa. We propose that economic freedom and institutional quality indicators of African countries are also important determinants of out‐migration from Africa. Hence, we investigate the effect of economic freedom and institutional quality on migration flow from 44 African countries to major migration destination countries. Aggregate indicators are derived for the quality of institutions and economic freedom using principal component analysis. Controlling for source and destination countries' income levels, population size, cultural, historical and physical distance, our findings provide evidence that migration flow from Africa is significantly determined by the institutional quality and economic freedom indicators in African countries. Our results are strongly robust to different econometric techniques used to control for sample selection bias, zero‐valued observations and endogeneity concern. Hence, improving institutional quality and maintaining economic freedom in African countries matters significantly to control out‐migration from Africa.

Date: 2020
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