The Role of Endogenous Technology in Making Sustained Economic Growth in Sub‒Saharan Africa: Panel GMM and VECM Approaches

Abstract

This study examines the role of endogenous technology in making sustained economic growth in a panel of 36 Sub-Saharan Africa (SSA) countries over the period 1990-2020. We derive total physical capital, total employment productivity (TEP), total factor productivity (TFP) and terms of trade (TOT) growth rates using various concepts. In this sense, the panel of short-run vector error correction model (VECM) and panel of long–run generalized method of moments (GMM) are applied and the estimation results are obtained. The empirical results reveal that there are significantly positive impacts of the growth rates of TFP, TEP and terms of trade (TOT) on real GDP growth rate in the long -run. These are profoundly important indicators for SSA today that timely using endogenous technology can play the central role in succeeding economic growth. And hence, without a greater supply of home–grown talent in the areas of the economic sector, it may be hard to break down the vicious circle of poverty, build prosperous, inclusive and resilient economies that can be feeding the people and enabling the countries to compete with trade globally.