TECHNOLOGICAL INNOVATIONS AND STRUCTURAL TRANSFORMATION IN AFRICAN ECONOMIES

George A. Muluh; Tsafack Miafo Dieubenit; Ngueuleweu Tiwang Gildas

doi:10.31435/rsglobal_ijite/30062022/7833

George A. Muluh Ph.D., Department of Agribusiness, Faculty of Economics and Management, University of Dschang, Cameroon
Tsafack Miafo Dieubenit Master in Economics, Faculty of Economics and Management, University of Dschang, Cameroon
Ngueuleweu Tiwang Gildas Ph.D., Master in Economics, Faculty of Economics and Management, University of Dschang, Cameroon

DOI: https://doi.org/10.31435/rsglobal_ijite/30062022/7833

Keywords: Structural Transformation, Technological Innovation, GMM Technique, 2SLS, Africa.

Abstract

This paper examines the role of technological innovations on structural transformation on economies of Africa. To attain this objective, it uses a sample of 32 African countries. The estimation techniques are system GMM and two stage least Square. Results indicate that technological innovations, as measured by total patents applications, have a significant effect on per sector value added. This result supports the almost nonlinear relationship of structural transformation since this study shows that manufacturing is the dominant sector in the promotion of structural changes as far as the implementation of technological innovations is concerned. Also, our results highlight that with regards to the African context, manufacturing is the sector in which technological innovation has the greatest impact on per sector value added and by so doing, it promotes structural transformation than other sectors (services or agriculture sector). As policy implication, governments need to encourage technological infrastructure through private and public spending on research and development especially for agricultural development to foster structural transformation.

References

Maher, Z.A., Ali, A., Koondhar, M.Y., Depar, M.H., Rind, M.M. and Shah, A., 2021. Framework for Location Based Attendance System by Using Fourth Industrial Revolution (4IR) Technologies. International Journal, 10(3).

David, P.A., 1990. The dynamo and the computer: an historical perspective on the modern productivity paradox. The American Economic Review, 80(2), pp.355-361.

ACET(2014), African Center for Economic Transformation (2014) Growth with depth. 2014 African Transformation Report. Accra:ACET (africantransformation.org/ wp-content/uploads/2014/02/2014- african-transformation-report.pdf)

Aghion, P., Akcigit, U., Bergeaud, A., Blundell, R., &Hémous, D. (2019). Innovation and top income inequality. The Review of Economic Studies, 86(1), 1-45.

Atalla, T., & Bean, P. (2017). Determinants of energy productivity in 39 countries: Anempirical investigation. Energy Economics, 62, 217-229.

Jha, R., & Afrin, S. (2017). Pattern and determinants of structural transformation in Africa. In Macroeconomic Policy Framework for Africa's Structural Transformation (pp. 63-95). Palgrave Macmillan, Cham.

Chenery, H. B., &Syrquin, M. (1975). Patterns of development, 1950-1970. Published for the World Bank by Oxford University Press.

Dabla-Norris, E., Thomas, A.H., Garcia-Verdu, R. and Chen, Y.(2013) Benchmarking structural transformation across the world. IMF Working Paper 13/176. Washington DC: International Monetary Fund (www.imf.org/en/Publications/WP/ Issues/2016/12/31/Benchmarking- Structural-Transformation-Across-the- World-40847)

Diao, X., Harttgen, K., & McMillan, M. (2017). The changing structure of Africa’s economies. The World Bank Economic Review, 31(2), 412–433.

Duarte, M. and Restuccia, D. (2010) ‘The role of structural transformation in aggregate productivity’ The Quarterly Journal of Economics 125(1): 129–173 (https://doi.org/10.1162/qjec.2010.125.1.129)

Freire C (2019). Economic diversification: A model of structural economic dynamics and endogenous technological change. Structural Change and Economic Dynamics. 4913–28.

Ciarli, T., Kenney, M., Massini, S., &Piscitello, L. (2021). Digital technologies, innovation, and skills: Emerging trajectories and challenges. Research Policy, 50(7), 104289.

Tokatli, N., 2013. Toward a better understanding of the apparel industry: a critique of the upgrading literature. Journal of Economic Geography, 13(6), pp.993-1011.

Fagerberg, J. (2000). Technological progress, structural change and productivity growth: a comparative study. Structural change and economic dynamics, 11(4), 393-411.

Lee, J. and Gereffi, G., 2015. Global value chains, rising power firms and economic and social upgrading. Critical perspectives on international business.

GBEMENOU, B., DOUKKALI, M. R., & ALOUI, O. (2020). Déterminants de la transformation structurelle en Afrique. Revue Marocaine des Sciences Agronomiques et Vétérinaires, 8(3).

Grossman, G. M., &Helpman, E. (1994). Endogenous innovation in the theory of growth. Journal of Economic Perspectives, 8(1), 23-44.

Fleet, J. C., Desmet, M., Johnson, R., & Li, Y. (2012). Vitamin D and cancer: a review of molecular mechanisms. Biochemical Journal, 441(1), 61-76.

Gollin, D. (2014). The Lewis model: A 60-year retrospective. Journal of Economic Perspectives, 28(3), 71-88.

Haraguchi, N., Cheng, C. F. C., &Smeets, E. (2017). The importance of manufacturing in economic development: has this changed?. World Development, 93, 293-315.

Herrendorf, B., Rogerson, R., &Valentinyi, A. (2013). Two perspectives on preferences and structural transformation. American Economic Review, 103(7), 2752-89.

Herrendorf, B., Rogerson, R., &Valentinyi, A. (2014). Growth and structural transformation. In Handbook of economic growth (Vol. 2, pp. 855-941). Elsevier.

Herrendorf, B., Rogerson, R., &Valentinyi, A. (2014). Growth and structural transformation. Handbook of economic growth, 2, 855-941.

Herrendorf, B., Rogerson, R. and Valentinyi, Á. (2014) ‘Growth and structural transformation’ in P. Aghion and S.N. Durlauf (eds.) Handbook of economic growth, vol. 2: 855–941. Amsterdam: Elsevier

Kaldor, N. (1967), Strategic Factors in Economic Development, New York State School of Industrial and Labor Relations, Cornell University.

Kaldor, N. (1966). Causes of the slow rate of economic growth of the United Kingdom: an inaugural lecture. London: Cambridge UP.

Kamguia, B., Keneck-Massil, J., Nvuh-Njoya, Y., &Tadadjeu, S. (2022). Natural resources and innovation: Is the R&D sector cursed too?. Resources Policy, 77, 102725.

Kouladoum, J. C., Wirajing, M. A. K., &Nchofoung, T. N. (2022). Digital technologies and financial inclusion in Sub-Saharan Africa. Telecommunications Policy, 102387.

Kuznets, S. (1959) ‘Quantitative aspects of the economic growth of nations: IV. Distribution of national income by factor shares’ Economic Development and Cultural Change 7(3, Part 2): 1–100 (https://doi.org/10.1086/449811)

Kuznets, S. (1966) Modern economic growth: rate, structure, and spread. New Haven CT: Yale University Press 33. Jayne, T.S., Mason, N.M., Burke, W.J. and Ariga, J., 2018. Taking stock of Africa’s second-generation agricultural input subsidy programs. Food Policy, 75, pp.1-14.

Lavopa, A., &Szirmai, A. (2012). Industrialization, employment and poverty.

Lee, J., &Gereffi, G. (2015). Global value chains, rising power firms and economic and social upgrading. Critical perspectives on international business.

Lewis, A. (1955), The Theory of Economic Growth, Homewood IL., Irwin. Lin, J.Y. (2011). New Structural Economics: A Framework for Rethinking Development, World

Lucas, R.E. (1988) ‘On the mechanics of economic development’ Journal of Monetary Economics 22(1): 3–42 (https://doi.org/10.1016/0304-3932(88)90168-7)

Martins, P. M. (2019). Structural change: Pace, patterns and determinants. Review of Development Economics, 23(1), 1-32.

Marouani, M. A., &Mouelhi, R. (2016). Contribution of structural change to productivity growth: Evidence from Tunisia. Journal of African Economies, 25(1), 110-132.

McMillan, M., and Rodrik, D. (2011) ‘Globalization, structural change and productivity growth’ in M. Bachetta and M. Jansen (eds.) Making globalization socially sustainable. Geneva: International Labour Organization and World Trade Organization

McMillan, M., Rodrik, D. and Verduzco- Gallo, I. (2014) ‘Globalization, structural change and productivity growth, with an update on Africa’ World Development 63: 11–32 (https://doi.org/10.1016/j.worlddev.2013.10.012)

McMillan, Margaret, Rodrik, and Claudia Sepulveda, 2017. Structural Change, Fundamentals and Growth: A Framework and Case Studies, Working Paper 23378, NBER Working Papers.

Muzari, W., Gatsi, W., &Muvhunzi, S. (2012). The impacts of technology adoption on smallholder agricultural productivity in sub-Saharan Africa: A review. Journal of Sustainable Development, 5(8), 69.

Ngai, L. R., &Pissarides, C. A. (2007). Structural change in a multisector model of growth. American economic review, 97(1), 429-443.

Nchofoung, T. N., &Asongu, S. A. (2022). ICT for sustainable development: Global comparative evidence of globalisation thresholds. Telecommunications Policy, 46(5), 102296.

Micheal, S., Khan, M. I., Akhtar, F., Ali, M., Ahmed, A., den Hollander, A. I., & Qamar, R. (2012). Role of Lysyl oxidase-like 1 gene polymorphisms in Pakistani patients with pseudoexfoliative glaucoma. Molecular vision, 18, 1040.

Ortega Argilés, R., Piva, M., &Vivarelli, M. (2014). The transatlantic productivity gap: Is R&D the main culprit?. Canadian Journal of Economics/Revue canadienned'économique, 47(4), 1342-1371.

Rogerson, R. (2008). Structural transformation and the deterioration of European labor market outcomes. Journal of political Economy, 116(2), 235-259.

Romer, P. M. (1994). The origins of endogenous growth. Journal of Economic perspectives, 8(1), 3-22.

Schumpeter, J.A. (1934), Capitalism, Socialism and Democracy, New York, Harper. win.

Song, M., Wang, S., & Sun, J. (2018). Environmental regulations, staff quality, green technology, R&D efficiency, and profit in manufacturing. Technological forecasting and social change, 133, 1-14.

Syrquin, M. (1988). Patterns of structural change. Handbook of development economics, 1, 203-273.

Cimoli, M., &Porcile, G. (2011). Learning, technological capabilities, and structural dynamics. In The Oxford Handbook of Latin American Economics.

Takahashi, K., Muraoka, R., & Otsuka, K. (2020). Technology adoption, impact, and extension in developing countries’ agriculture: A review of the recent literature. Agricultural Economics, 51(1), 31-45.

UNIDO (United Nations Industrial Development Organization) and ICSHP (International Center on Small Hydro Power), 2015. World Small Hydropower Development Report 2013.Available at http://www.smallhydroworld.org

You, K., Dal Bianco, S., & Amankwah-Amoah, J. (2020). Closing technological gaps to alleviate poverty: evidence from 17 sub-saharanafrican countries. Technological Forecasting and Social Change, 157, 120055.

Mensah K, Elizabeth B, and Kwesi A. (2016), "Employee motivation and work performance: A comparative study of mining companies in Ghana." Journal of Industrial Engineering and Management (JIEM) 9, no. 2 (2016): 255-309.