Original Article

Innovation in Africa: Why Institutions Matter

  1. Stephen Oluwatobi1,*,
  2. Uchenna Efobi2,
  3. Isaiah Olurinola1 and
  4. Philip Alege1

Article first published online: 29 OCT 2014

DOI: 10.1111/saje.12071


Additional Information

How to Cite

Oluwatobi, S., Efobi, U., Olurinola, I. and Alege, P. (2014), Innovation in Africa: Why Institutions Matter. South African Journal of Economics. doi: 10.1111/saje.12071

Author Information

  1. 1

    Department of Economics and Development Studies, Covenant University

  2. 2

    School of Business, Covenant University

*Corresponding author: PhD Student, Department of Economics and Development Studies, Covenant University, Km 10 Idiroko Road, Sango Ota, Ogun State 112233, Nigeria. Tel.: +2347039580569. Email: stephen.oluwatobi@covenantuniversity.edu.ng.

Publication History

  1. Article first published online: 29 OCT 2014

Funded by

  • Covenant University

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Keywords:

  • J24;
  • O31;
  • O32;
  • O43
  • Africa;
  • human capital;
  • innovation;
  • institutions

Abstract

Given the role that innovation plays as an engine for economic development, we examined the enabling factor of institutions in Africa. Particularly, attention was given to determining the equivalent effects of institutional development on innovation. A sample of 40 African countries over the period 1996-2012 was employed, and our baseline equation was estimated using the system generalised method of moments (SGMM) estimation technique. The empirical result reveals that government effectiveness and regulatory quality are two institutional measures that have the most equivalent impact on innovation. The extent of impact is an indication that institutions matter, especially when considering innovation in Africa. Therefore, to advance the rate of innovation in Africa, improving frameworks to drive regulations and enhance government effectiveness is a necessary instrument. Having these in place, Africa will be able to catch up with advanced economies.

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