Entrepreneurship as a policy transmission mechanism for sustainable development in Africa

Abstract

Abstract This study examines entrepreneurship as a policy transmission mechanism for sustainable development in Africa, emphasising the conditioning roles of institutional quality and digital financial inclusion within a multidimensional sustainability framework. Using a balanced panel dataset of twenty-five African countries from 2010 to 2025, the analysis applies a dynamic panel estimation approach, nonlinear threshold modelling, distributional regression techniques, hierarchical modelling, and causal machine-learning methods to address endogeneity, nonlinearity, and cross-country heterogeneity. The findings indicate that entrepreneurship exerts a positive influence on sustainable development, while regulatory quality and digital financial inclusion independently strengthen sustainability performance. Importantly, interaction and threshold results reveal that entrepreneurship becomes significantly more effective once institutional quality surpasses a critical level, indicating the presence of institutional tipping points. Distributional and causal evidence further demonstrates heterogeneous effects, with stronger impacts observed in countries characterised by robust governance structures and deeper financial inclusion. The results highlight that entrepreneurship alone is insufficient to deliver sustainability gains; its effectiveness depends on complementary institutional credibility, macroeconomic stability, and financial infrastructure. Methodologically, the study contributes by integrating dynamic econometric and machine-learning approaches within a unified African context. The findings offer policy-relevant insights for designing entrepreneurship strategies that promote inclusive, environmentally conscious, and institutionally grounded sustainable development across heterogeneous African economies.