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Core infrastructure and industrial performance in Africa: Do institutions matter?

Ekundayo Mesagan () and Mustapha O. Bello ()
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Mustapha O. Bello: University of Lagos

International Review of Economics, 2018, vol. 65, issue 4, No 7, 539-562

Abstract: Abstract The study investigates the role of institution in the nexus between core infrastructure and industrial performance in Africa. In this study, we select 25 African economies and data cover the period of 1996–2016. To conduct the panel analysis, we use variables such as manufacturing value added per capita to proxy industrial performance and employ the principal component analysis to generate core infrastructure index, as well as institution index. Using the fixed effect model, we find that core infrastructure has a positive but insignificant impact on industrial performance in the selected African countries. However, when we interact infrastructure with institution, results suggest that infrastructure has a positive and significant effect on industrial performance, alluding to the fact that institution is very important in making infrastructure to enhance industrial performance in Africa. Hence, African governments should formulate a sound industrial policy and standardise regulatory quality to boost industrial performance.

Keywords: Infrastructure; Institution; Industrial performance; Africa (search for similar items in EconPapers)
JEL-codes: D02 E62 H54 L94 L96 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s12232-018-0314-y

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