Business Dynamics, Knowledge Economy, and the Economic Performance of African Countries
Forthcoming: Information Development, Volume, 36 issue: 1, page(s): 128-152 (March, 2020).
45 Pages Posted: 25 Jan 2019 Last revised: 6 Mar 2020
Date Written: January 22, 2019
This paper develops a framework (a) to examine whether or not the African business environment hinders or promotes the knowledge economy (KE), (b) to determine how the KE affects economic performance, and (c) how economic performance relates to the inequality-adjusted human socioeconomic development (IHDI) of 53 African countries during the 1996-2010 time period. We estimate the linkages with three related equations. The results support a strong correlation between the dynamics of starting and doing business and variations in KE. The results also show that there exists a weak link between KE and economic performance. Nonetheless, KE-influenced performance plays a more important role in socioeconomic development than some of the conventional control variables like foreign direct investment (FDI), foreign aid, and even private investment.
Keywords: Business Dynamics; Knowledge Economy; Economic Performance
JEL Classification: L59; O10; O30; O20; O55
Suggested Citation: Suggested Citation