From Digital Transformation to Circular Growth: The Role of Economic Complexity and Eco-Innovation in Africa’s Sustainable Future

Hela Mili ()
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Hela Mili: Department of Economics, College of Business, Imam Mohammad Ibn Saud Islamic University (IMSIU), Riyadh 11432, Saudi Arabia

Economies, 2025, vol. 13, issue 12, 1-27

Abstract: This study investigates how eco-innovation, digitalization, and economic complexity drive the circular economy in African economies between 2000 and 2024. Using the Dumitrescu–Hurlin causality test with POLS, DKSE, and MMQR estimators, we identify determinants of CE growth under varying conditions of development. Our results show the strongest positive effect on CE is induced by digitalization, followed by eco-innovation and economic complexity. In addition, digitalization equally enhances CE at all quantiles, while for eco-innovation, its contribution towards CE growth is greater in low-performing CE countries. The evidence suggests that in the course of its circular transformation, Africa needs to embark on digital infrastructure, innovation capacity, and productive diversification. Accordingly, such regional strategies will be contributing to SDG 9 on industry and innovation, SDG 12 on responsible consumption, and to the African Union Agenda 2063 for sustainable growth.

Keywords: circularity; green innovation; economic complexity; digital technologies; Africa (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2025
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