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Catalysts of Economic Welfare in Africa: A Cross-Sectional Autoregressive Distributed Lag Approach

Catalysts of Economic Welfare in Africa: A Cross-Sectional Autoregressive Distributed Lag Approach AbstractThis study provides empirical perspectives on the catalysts of economic welfare in Africa, drawing inference from macroeconomic and non-macroeconomic factors. Leveraging a sample of a balanced panel dataset of 35 countries across Africa, this study provides novel applications of the cross-sectional autoregressive distributed lag methodology to economic welfare analysis in Africa. Issues of cross-sectional dependence and slope homogeneity were accounted for whilst establishing causal relationships between economic welfare proxied by the Human Development Index and macroeconomic and non-macroeconomic drivers of welfare. Based on cross-sectional autoregressive distributed lag estimation results, a 1% increase in economic growth was shown to account for a 0.233 percent and 0.253 percent increase in economic welfare in the long run and short run respectively. In addition, technology accounted for a 1.81 percent increase in economic welfare in the long run. The outcome of the Dumitrescu–Hurlin causality test demonstrated causality between trade openness, government effectiveness, economic growth, and economic welfare. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Acta Universitatis Sapientiae Economics and Business de Gruyter

Catalysts of Economic Welfare in Africa: A Cross-Sectional Autoregressive Distributed Lag Approach

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Publisher
de Gruyter
Copyright
© 2023 Ayomide Oluwafunmisho Kuti et al., published by Sciendo
eISSN
2360-0047
DOI
10.2478/auseb-2023-0002
Publisher site
See Article on Publisher Site

Abstract

AbstractThis study provides empirical perspectives on the catalysts of economic welfare in Africa, drawing inference from macroeconomic and non-macroeconomic factors. Leveraging a sample of a balanced panel dataset of 35 countries across Africa, this study provides novel applications of the cross-sectional autoregressive distributed lag methodology to economic welfare analysis in Africa. Issues of cross-sectional dependence and slope homogeneity were accounted for whilst establishing causal relationships between economic welfare proxied by the Human Development Index and macroeconomic and non-macroeconomic drivers of welfare. Based on cross-sectional autoregressive distributed lag estimation results, a 1% increase in economic growth was shown to account for a 0.233 percent and 0.253 percent increase in economic welfare in the long run and short run respectively. In addition, technology accounted for a 1.81 percent increase in economic welfare in the long run. The outcome of the Dumitrescu–Hurlin causality test demonstrated causality between trade openness, government effectiveness, economic growth, and economic welfare.

Journal

Acta Universitatis Sapientiae Economics and Businessde Gruyter

Published: Oct 1, 2023

Keywords: Africa; CS-ARDL; Human Development Index; economic welfare; poverty; F43; D60; I32; C33

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