October 3, 2025 Thesis Open Access

KALKIDAN SAMUEL

Citation Style Language JSON Export

{
  "DOI": "10.20372/nadre:19325", 
  "language": "eng", 
  "title": "STRUCTURAL CHANGE AND ECONOMIC GROWTH IN AFRICA", 
  "issued": {
    "date-parts": [
      [
        2025, 
        10, 
        3
      ]
    ]
  }, 
  "abstract": "<p>Since the late 1950s and mid 1960s which is known to be the period of African independence,<br>\nAfrica&rsquo;s growth performance and structural change, as indicated by the growth of the secondary<br>\nsector, have shown a fluctuating pattern. The period between the 1950s and the mid-1970s was<br>\nrelatively of good economic performance and expansion of the manufacturing sector while the<br>\nperiod after the mid-1970s to the mid-1990s is characterized by poor economic performance and<br>\ncontraction of the secondary sector. The period since the late 1990s is a period of rapid<br>\neconomic growth but declining share of the secondary sector which implies negative structural<br>\nchange in the context of this study. Given this pattern of economic growth and structural change,<br>\nprevious studies focus on the effect of structural change on economic growth of Africa.<br>\nAccordingly, this study aims at analyzing the effect of economic growth on structural change in<br>\nAfrica.Other drivers of structural change in Africa are also studied by considering the Natural<br>\nresource endowment hypothesis, Geography hypothesis, exchange rate policy hypothesis and<br>\nhuman capital hypothesis. The effect of openness on structural change is also analyzed by<br>\nconsidering the effect of trade on sectorial value added share.Secondary data for a set of 43<br>\nAfrican countries for the period between 1980 to 2020 is collected from the World Bank&rsquo;s World<br>\nDevelopment Indicators Database. The countries and years of study are selected based on the<br>\navailability of data. The fixed Generalized Least Squares (FGLS) estimation is employed to<br>\nestimate the parameters as it addresses the problems of heterosckedasticity, autocorrelation and<br>\nCross-sectional dependence existing within the data. The Durbin-Hausman-Wu endogenity test<br>\nis applied and the variables are found to be strictly exogenous. The result of the study shows that<br>\nEconomic growth has a significant negative effect on Structural change. This is consistent with<br>\nthe reality faced by African economies in the past decades for which economic growth and<br>\nstructural change move in opposite directions to each other. Particularly after the mid-1990s,<br>\nthe economy is growing faster but the industry sector&rsquo;s share in output which represents<br>\nstructural change, is declining. Exchange rate depreciation has also a negative effect on<br>\nstructural change in Africa for the last four decades. On the other hand, Human Capital and<br>\nOpenness has a positive effect on structural change that more improved human capital and more<br>\nopen economy results in an increasing share of Industry Value Added thereby facilitating<br>\nstructural change. Natural resource endowment and Geography are found to be insignificant<br>\nvariables in the model estimation. Based on the result, the study recommends those policy<br>\ndesigns focused on: driving the fruits of economic growth towards the expansion of the industry<br>\nsector,increasing investment in human capital, following more liberal trade policies and well<br>\nmanaged exchange rate system.</p>", 
  "author": [
    {
      "family": "KALKIDAN SAMUEL"
    }
  ], 
  "version": "01", 
  "type": "thesis", 
  "id": "19325"
}