Assessing the effect of inequality on sectoral economic growth in Sub-Saharan Africa
Date
2022-05
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Abstract
Inequality has received much attention over the recent years due to its numerous effects on
growth in an economy. Existing studies on the effects on inequality have been widely
documented especially on economic growth. However, most of these studies have focused
on inequality and economic growth at the aggregate level, while little consideration is given
to sectoral growth. Therefore, this paper examines the relationship between inequality and
growth in the agriculture, manufacturing, and service sectors for the sub-Saharan Africa
region. The study employed the Ordinary Least Squares regression model on pooled crosssectional
data from 30 SSA countries with their most recent available data. The results
revealed that a significant negative relationship exists between inequality and growth in
the manufacturing sector. On the other hand, a negative non-significant relationship was
found between inequality and agricultural growth and a positive insignificant relationship
for the service sector. Ultimately, the significant negative relationship found implies that
in the presence of high inequality, growth in the manufacturing sector is reduced. Hence,
in the fight against inequality, policy makers and government bodies must gear their
redistributive and welfare efforts more towards the manufacturing sector.
Description
Undergraduate thesis submitted to the Department of Business Administration, Ashesi University, in partial fulfillment of Bachelor of Science degree in Business Administration, May 2022
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