Author: John C. Anyanwu & Benedict Ozurumba
Volume: 60 Issue No:3 Year:2018

Abstract: This paper extends and contributes to the literature on the drivers of structural components of manufacturing value added development in Africa. Given the problem of possible endogeneity, the estimation technique is the IV-SLS estimation procedure, with year fixed and sub-regional effects. It found that the key drivers of the sectoral MVA (as of total MVA) differed substantially across the sectors in their impact in terms of sign and significance. A key finding is that, apart from chemical manufacturing that is linearly and negatively affected by the level of economic development, food, beverages and tobacco; machinery; textiles and clothing; and other manufacturing were significantly affected by economic development to the third degree polynomial, with the first two with positive leading coefficient and the last two with negative leading coefficient. There was also a strong support for a non-monotonic, inverted U-shaped relationship between food, beverages and tobacco, textiles and clothing and other manufacturing MVA with tertiary education. Other drivers with differential impacts included primary and secondary education, natural resources dependence, FDI stock, science and technology proxy, ICT, social and political globalization, and energy use intensity. The paper thus offered some policy suggestions based on the conclusion.

JEL Classification: L16, L62, L64, L65, L66, L67, L69, O14, O55.