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Advancing sustainable industrial development in Africa: the role of institutional quality and renewable energy

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Abstract

Industrial development has unarguably created economic benefits that could drive structural economic transformation but its associated environmental consequences undermine sustainable development. Thus, African countries constantly face balancing industrial progress with environmental sustainability. We, therefore, evaluated whether sustainable industrial development is feasible in Africa and accounted for the role of institutional quality and renewable energy in achieving this feat. Using the feasible generalized least square estimator to analyse relevant data of 46 African countries spanning 2000–2021, we found that (i) Africa is yet to achieve sustainable industrial development; (ii) weak institutional quality impedes the attainment of sustainable industrial development in Africa, although the effects depend on the measure of institutional quality; and (iii) renewable energy considerably improves the prospects of achieving sustainable industrial development in Africa. Thus, implementing a holistic and integrated approach that combines efforts to reduce industrial environmental impact, promote renewable energy, and enhance institutional quality can yield synergistic effects and contribute to more sustainable industrial development in Africa.

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Data availability

Data are available on the World Bank’s World Development Indicator (https://databank.worldbank.org/source/world-development-indicators), World Governance Indicator (https://databank.worldbank.org/source/worldwide-governance-indicators) and the Global Footprint Network (https://footprint.info.yorku.ca/data/) databases.

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Acknowledgements

The authors acknowledge the comments received during the 2023 African Economic Conference, where this paper was presented. We also appreciate the anonymous reviewers’ insightful comments geared toward improving the quality of our paper.

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The authors declare that no funds, grants, or other support were received during the preparation of this manuscript.

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Authors and Affiliations

  1. Department of Economics, University of Ibadan, Ibadan, Oyo State, Nigeria

    Musibau Adetunji Babatunde

  2. Institute of Economics, Technische Universität Ilmenau, Ilnemau, Germany

    Joshua Adeyemi Afolabi

  3. Nigerian Institute of Social and Economic Research (NISER), Ibadan, Oyo State, Nigeria

    Joshua Adeyemi Afolabi

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  1. Musibau Adetunji Babatunde
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Correspondence to Joshua Adeyemi Afolabi.

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Appendix

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Table 7 List of Countries
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Table 8 Principal components/Correlation
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Table 9 Principal components (Eigenvectors)
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Babatunde, M.A., Afolabi, J.A. Advancing sustainable industrial development in Africa: the role of institutional quality and renewable energy. Environ Dev Sustain (2024). https://doi.org/10.1007/s10668-024-05170-8

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