Assessing the Impact of Infrastructural Development on Manufacturing Value Added and Employment in Africa Emerging Economies

Richardson Kojo Edeme, Patricia Ngozi Buzugbe, Nelson C. Nkalu, Winnie O Arazu

Research output: Contribution to journalArticlepeer-review

Abstract

This study empirically investigates the impact of infrastructural development on manufacturing value added and employment in Africa emerging economies over the period 1980-2018. This study employed pooled mean group estimation, which efficiently estimated non-stationary panel datasets with cross-sectional dependence and unobserved heterogeneity. Our empirical estimates indicate an increase of 1% in access to electricity would contribute to manufacturing value added (MVA) and employment growth by 0.02% and 0.03% respectively. Our results show that the coefficient of the ICT is positive and statistically significant in influencing MVA and employment. Again, the results show that foreign direct investment has positive relationship with both MVA and employment at 5% level of significance as indicated by the coefficient. Likewise, our results reflect a positive association with MVA and employment in the economies Transport infrastructure has negative effect on MVA and employment. Our estimates suggest that on average, a 1% increase in transport infrastructure will lead to about 0.018% and 0.076% decrease in MVA and employment respectively. Regarding the impact of macroeconomic factors, we found that level of development has negative effect on MVA and employment, an indication that the growth generated by Africa countries does not support employment. The findings of the study reveal that electricity and ICT infrastructure, along with other macroeconomic factors are important drivers MVA and employment in Africa emerging economies. However, the capacity of infrastructure to enhance MVA appears to have weakened, hence the palpably weakness to generate employment.
Original languageEnglish
Pages (from-to)366-376
Number of pages11
JournalJournal of Applied Economic Sciences
Volume15
Issue number2
Publication statusPublished - Jul 2020

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