The Africa-Dummy in Growth Regressions
The Africa-Dummy has been identfied and different explanations for its appearance have been published. In this paper, the issue of the empirical identifcation of the Africa-Dummy is addressed. We introduce a fixed effects regression model to identify the Africa-Dummy in one regression step so that its correlations to other coeffcients can be estimated. A semiparametric extension of this model checks whether the Africa-Dummy is a result of misspecification of the functional structure. Furthermore, we show that sub-Saharan African countries have a positive return to the population growth and when adding interaction effects, the Africa-Dummy is even positive. Moreover, we show that the Africa-Dummy changes dramatically over time and the punishment for sub-Saharan African countries decreases incrementally since the mid-nineties. According to the Augmented Solow Growth model, it was even insignificant since the end-nineties.
Year of publication: |
2011-09-06
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Authors: | Köhler, Max ; Sperlich, Stefan ; Vortmeyer, Julian |
Institutions: | Courant Research Centre PEG |
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