Open AccessStructural Convergence between African Countries: Empirical Evidence
Author(s) -
Ali BAKO OUSMANE,
Mehmet Şişman
Publication year - 2022
Publication title -
journal of world economy, transformations and transitions
Language(s) - English
Resource type - Journals
ISSN - 2792-3851
DOI - 10.52459/jowett13130122
Subject(s) - convergence (economics) , economics , tobit model , panel data , productivity , tertiary sector of the economy , human capital , econometrics , empirical evidence , labour economics , instrumental variable , demographic economics , development economics , macroeconomics , economic growth , economy , philosophy , epistemology
This paper aims to investigate structural convergence in selected African countries over the period 1994-2019. Using panel data for 48 African countries and several estimation methods [Panel-Corrected Standard Errors (PCSE), Feasible Generalized Least Squares (FGLS), tobit model, instrumental variable, and Granger non-causality], the results show the existence of the phenomenon of sectoral structural convergence in Africa, i.e. a greater similarity in sectoral structures while income gaps are narrowing. The paper also highlights the service sector's low relative productivity level and industrial sector's low labor force attractiveness despite a significant shift in labor from the agricultural sector and a higher level of relative productivity respectively. To address this issue, the development and acquisition of human and physical capital would be necessary to develop the industrial sector and increase the service sector's productivity.