Economic growth through digitalization in Africa: does financial sector development play a mediating role?

PurposeThis paper aims to analyse economic growth in Africa focussing on the role of digitalization and financial sector development.Design/methodology/approachThe authors employ country-level data from 36 African countries over the period 2000–2020 and used fixed effect, random effect and the Hausm...

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Published inInternational journal of emerging markets Vol. 19; no. 10; pp. 3111 - 3138
Main Authors Iddrisu, Abdul Ganiyu, Chen, Bei
Format Journal Article
LanguageEnglish
Published Bradford Emerald Publishing Limited 28.10.2024
Emerald Group Publishing Limited
Subjects
Bandwidths
Banks
Borrowing
Cost control
Digital technology
Economic growth
Financial services
Global economy
Households
Internet
Personal computers
Policy making
Technology adoption
Africa
Digitalization
F43
Economic growth
Africa
G2
L86
Financial sector development
O55
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Summary:PurposeThis paper aims to analyse economic growth in Africa focussing on the role of digitalization and financial sector development.Design/methodology/approachThe authors employ country-level data from 36 African countries over the period 2000–2020 and used fixed effect, random effect and the Hausman–Taylor estimation techniques.FindingsThe study, first finds that, digitalization propels financial sector development in Africa. Building on this, the study further finds that, digitalization conditioned on financial sector development at best does not promote economic growth in Africa. However, results of the net effects suggest that digitalization, overall, improve economic growth in Africa.Social implicationsIn the current environment of a sluggish global economy, digitalization can play an important role in assisting policymakers to spur economic growth. This has attracted the attention of many researchers in the developed world. However, little is done about the subject matter in Africa.Originality/valueThe findings of this paper are novel in the African sub-region with important policy implications.
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ISSN:1746-8809
1746-8817
DOI:10.1108/IJOEM-02-2022-0278