Do international tourism arrivals, infrastructural development, and trade openness promote economic complexity in Africa?

Abstract

Recent scholarly articles consistently show that economic complexity promotes economic development. However, upon further examination of the literature, it becomes evident that macroeconomic determinants of economic complexity are not fully investigated, particularly in Africa. This study addressed this gap in the literature by investigating the impact of international tourism arrivals, infrastructural development, and trade openness on economic complexity in Africa. The study utilized the dynamic system GMM and panel Fixed Effects estimators for 34 African economies from 2010 to 2021. The results indicated that international tourism arrival and trade openness have beneficial effects on economic complexity in Africa, while the effects of infrastructural development remained mainly negative. Additionally, we established that human capital development and foreign direct investment inflow are potent channels for promoting economic complexity on the continent. We highlighted the policy implications of these findings.