@workingpaper{Asongu2014b,
title = {Economic Implications of Business Dynamics for KE-Associated Economic Growth and Inclussive Development in African Countries},
author = {Voxi Amavilah & Antonio Andrés R Simplice A. Asongu},
editor = {African 2014 Governance and Development Institute WP/14/023},
url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Economic-Implications-of-Business-Dynamics-for-KE-Associated-Economic-Growth-and-Inclusive-Development-in-African-Countries.pdf},
year = {2014},
date = {2014-12-01},
abstract = {This paper develops an empirically-relevant framework (a) to examine whether or not the
African business environment hinders or promotes the knowledge economy (KE), (b) to
determine how the KE which emerges from such an environment affects economic growth, and
(c) how growth in turn relates to the ‘inclusive development’ of 53 African countries during the
1996-2010 time period. The framework provides a modest guide to policymaking about, and
further research into, such relationships. We implement the framework by building a three-stage
model and rationalizing it as five interrelated hypotheses. To allow greater concentration on the
issues that are themselves already complex, our model is very simple, but clear. For example, we
make neither an attempt to evaluate causality nor to test for it, even though we suspect the links
to be multi-directional – opportunity costs are everywhere. Instead we focus on fundamental
relationships between the dynamics of starting business and doing business as expressed in the
state of KE, and through it to the inclusive development via the economic growth of those
countries. Estimation results indicate that the dynamics of starting and doing business explain
strongly a large part of variations in KE. The link between KE and economic growth exists, but it
is weak, and we provide plausible reasons for such a result. Despite the weak association
between KE and economic growth, KE-influenced growth plays a very important role in
inclusive development. In fact, growth of this kind has stronger effects on inclusive development
and by implication on poverty reduction, than some of conventional controls in this study such as
FDI, foreign aid, and even private investment. There is clearly room for further research to
improve the results, but just as clearly practical policy is best served by not neglecting the
relationships examined in this paper.},
keywords = {Business Dynamics; Knowledge Economy; Development; Africa},
pubstate = {published},
tppubtype = {workingpaper}
}