Towards innovation in West African business sophistication: Lessons from the Eurozone
摘要
This paper aims to shed light on the key factors that contribute to improving innovation in West African business sophistication by learning from the experience of the Eurozone. We have used panel data from 2013 to 2022 on 15 West African countries and 20 Eurozone countries. The study opted for non-parametric and semi-parametric modelling, estimated through the Generalized Additive Method (GAM). This methodology highlights the various linear and non-linear relationships after estimating each unspecified smooth function linking the response variable and each predictor. The results show that, first, human development in West Africa has not yet reached the minimum threshold required to positively impact innovation in business sophistication. Second, the relationship between human development and innovation in business sophistication in the Eurozone is non-linear, with a minimum threshold of 0.861 at which the Human Development Index positively influences innovation in business sophistication in the Eurozone. Third, political stability and non-violence positively and linearly influence innovation in business sophistication, whether in West Africa or the Eurozone. Some policy implications emerge from the paper’s findings. First, there is a need for West African governments and their development partners to increase investment in projects that promote human development and innovation in education. Second, there is a need to improve institutional quality through political stability and non-violence. Third, West African monetary authorities must ease private sector financing conditions by encouraging Public-Private Partnership investment in research and development (R&D).