Construction institutions and economic growth in sub-Saharan Africa

2019-11-02 13:13:33 Viewed: 1481 Downloads: 996
  • Construction institutions and economic growth in sub-Saharan Africa

      Paul Alagidede and Jones OdeI Mensah

     Publisher: African Review of Economics and Finance

    Pub: 2019-11-02 13:13:33

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  • The construction sector in developing countries has propelled economic growth in the most recent period, yet analysis of growth performance has failed to take this into account. This article is a comparative analysis of the relationship between the construction sector and aggregate output for a panel of sub-Saharan African countries using a panel generalized methods of moments (GMM). After accounting for the effects of institutional set up, cross sectional heterogeneity and non-linearity, our results revealed that the construction sector affects growth positively and most importantly, developing the right institutions could further enhance this impact. The intrinsically non-linear relationship between the construction and output growth is very mute in our sample, suggesting that, sub-Saharan African countries have not yet reached the stage of development where construction growth becomes trivial. We further show that East Africa experienced a robust impact of construction on economic growth compared to West and Southern Africa.

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  • Keywords

    Construction, Output growth, Institutions,Endogeneity.


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