CoChat
Sign Up
Cited by 58Fiscal Policy and Economic GrowthEconomic Growth and DevelopmentEconomic Growth and Productivity

Financial development and human capital thresholds for the infrastructure development-industrialization nexus in Africa

Open access
Nkemgha, Guivis Zeufack, Nchofoung, Tii N., Sundjo, Fabien·2023·Cities
DOI 10.1016/j.cities.2022.104108
Open this paper in CoChat — free accountOpen PDF

Abstract

Examining the value-added link between infrastructure and industrialization is fundamental to achieving Sustainable Development Goal (SDG) 9, which consists of building resilient infrastructure, promoting inclusive and sustainable industrialization and fostering innovation. The objectives of this paper are to analyse the effect of infrastructures on industrialisation and how financial development and human capital modulate this effect in 33 African countries during the period 2003-2019 through the system GMM methodology. The results show that infrastructural development has a direct enhancing effect on industrialisation in Africa. When the indirect effect regressions through the modulating effects of financial development and human capital are considered, the net effects are equally positive though the results vary across the different specifications of infrastructure and the specific transmission channel considered. For instance, the indirect effect through the interaction of electricity and transport infrastructures with financial development and human capital produced a negative net effect. The thresholds of financial development and human capital required to nullify these negative effects are provided and practical policy implications are discussed.

Integrity signals

Registry

Crossref · 10.1016/j.cities.2022.104108

Cites

58 of 58 references verified0 citation errors · 0 not checkable

Statistics

Nothing to recompute.

Claims the paper makes

7 of 28 cited sources checked · 3 supported · 0 flagged · accuracy not yet measured

  • Premisecitation

    In sub-Saharan Africa, the quantity and quality of telecommunications infrastructure is the main factor influencing industrial sector productivity.

    “The result of the study indicates that the main factor influencing the productivity of the industrial sector in sub-Saharan Africa is the quantity and quality of telecommunications infrastructure.”
    Quote in the paperSubstantial claim1 of 1 sources checked
    • cites Azolibe and Okonkwo (2020) source

      The results discussion reports that the ICT index was the only infrastructure measure with a significant positive relationship to industrial productivity. But the paper does not establish telecommunications as the main factor among all influences, and its ICT index measures phone subscriptions and internet users, not infrastructure quality (Section 3.1.5). The Conclusion also attributes relatively low productivity largely to poor electricity and transport infrastructure and underused water and sanitation infrastructure. (LLM, conf=0.86)

      Experimental — accuracy not yet measured
  • Findingown data

    Infrastructural development has a direct enhancing effect on industrialisation in Africa.

    “The results show that infrastructural development has a direct enhancing effect on industrialisation in Africa.”
    • Also stated in: § IV. Results and discussion · boosted
      “Tables 1 and 2 show that infrastructural development have a positive and robust effect on industrialisation.”
    Quote in the paperSubstantial claim
  • Findingown data

    Economic growth has a deleterious effect on industrialisation.

    “Moreover, human capital, rule of law, and foreign direct investment inflows has enhancing effects on industrialisation while economic growth and trade openness have deleterious effects.”
    Quote in the paperSubstantial claim
  • Findingreasoning

    At a financial development threshold of 138.4615, the positive net effect of the interaction between financial development and infrastructures is nullified.

    “However, at a financial development threshold of 138.4615, this positive net effect is nullified.”
    Quote in the paperSubstantial claim
  • Findingown data

    Foreign direct investment inflows have enhancing effects on industrialisation.

    “Moreover, human capital, rule of law, and foreign direct investment inflows has enhancing effects on industrialisation while economic growth and trade openness have deleterious effects.”
    Quote in the paperSubstantial claim
  • Classified as probably not a substantial claim. 26
  • May combine two claims. 12
  • The quote only partly states this claim. 8

  • Classified as probably not a substantial claim.

    Study design and conductcitation

    The second lags of the explanatory variables are used as instruments in both the level and difference equations.

    “The second lags of the explanatory variables are used as instruments in both the level and difference equations.”
    Quote in the paperSubstantial claim2 of 3 sources checked
    • cites Asongu and Nwachukwu, 2016 source

      Section 3.2 (p. 11) describes a system GMM procedure with level and difference equations, and Section 4.1 (pp. 14–15) discusses instrument-validity tests. The available text does not say that second lags of the explanatory variables instrument both equations; the equations themselves are not decoded in our copy. (LLM, conf=0.76)

      Experimental — accuracy not yet measured
    • cites Asongu and Leke, 2019

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

    • cites Nchofoung et al., 2021 source

      Section 3.2 (p. 10) describes the GMM method and says period dummies are used as instruments, but it does not specify second lags as instruments in both level and difference equations. Searches for the quoted wording and for second-lag instruments found no such statement; the estimation equations in our copy are not decoded. (LLM, conf=0.69)

      Experimental — accuracy not yet measured

  • Classified as probably not a substantial claim.

    Study design and conductcitation

    All explanatory variables are considered as potential sources of endogeneity.

    “Based on contemporary literature (Asongu and Nwachukwu, 2016;Asongu and Leke, 2019;Nchofoung et al., 2021), all our explanatory variables are considered as potential sources of endogeneity.”
    Quote in the paperSubstantial claim2 of 3 sources checked
    • cites Asongu and Nwachukwu, 2016 source
    • cites Asongu and Leke, 2019

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

    • cites Nchofoung et al., 2021 source

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Governance and trade liberalization are channels through which infrastructure development impacts industrialization in sub-Saharan Africa.

    “Using the PSCE and FGLS methodology, the authors found that governance and trade liberalization are channels through which infrastructure development impacts industrialization.”
    Quote in the paperNot a substantial claim1 of 1 sources checked
    • cites Nnyanzi et al (2022) source

      The Results and discussion section (“Interaction effects,” page unavailable) finds that governance and trade openness change the estimated relationship between infrastructure and manufacturing output in Sub-Saharan Africa, supporting their role as moderators. The methodology claim is overstated: the “Robustness checks” section says FGLS was used to re-estimate the baseline model, not the interaction findings; PCSE was the primary estimator. (LLM, conf=0.83)

      Experimental — accuracy not yet measured

  • May combine two claims.

    Premisecitation

    In sub-Saharan Africa, the relatively low productivity of the industrial sector is largely due to poor quality electricity and transport infrastructure and underutilization of water supply and sanitation infrastructure.

    “The analysis shows that the relatively low level of productivity of the industrial sector in sub-Saharan Africa is largely due to the poor quality of their electricity and transport infrastructure; and the underutilization of water supply and sanitation infrastructure.”
    Quote in the paperSubstantial claim1 of 1 sources checked
    • cites Azolibe and Okonkwo (2020) source

  • May combine two claims.

    Findingown data

    The indirect effect of financial development interaction with infrastructures overrides the direct effect, producing a positive net effect.

    “The indirect effect overrides the direct effect producing a positive net effect.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Findingown data

    When financial development is interacted with infrastructures, the direct effect is negative and the indirect effect is positive.

    “From table 3, financial development is interacted with infrastructures producing a negative direct effect and a positive indirect effect.”
    Quote in the paperSubstantial claim

  • The quote only partly states this claim.

    Findingown data

    The interaction between ICT infrastructure and human capital has a positive and significant effect on manufacturing value added.

    “Ict*hc | | | | 0.563* | |”
    Quote in the paperSubstantial claim

  • Probably not a substantial claim: may not pass S1 (asserted), S3 (load-bearing), S4 (based). The quote only partly states this claim.

    Findingnone given

    Electricity infrastructure has no significant effect on industrial value added per capita.

    “electricity | | | 0.000198 | | |”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S1 (asserted), S3 (load-bearing).

    Findingown data

    The interaction between electricity infrastructure and human capital has no significant effect on manufacturing value added.

    “Electricity*hc | | | 0.0695 | | |”
    Quote in the paperNot a substantial claim

  • The quote only partly states this claim.

    Findingown data

    Water and sanitation infrastructure has a positive and significant effect on industrial value added per capita.

    “Wss | | | | | 0.00174** |”
    Quote in the paperSubstantial claim

  • Probably not a substantial claim: may not pass S1 (asserted), S3 (load-bearing), S4 (based). The quote only partly states this claim.

    Findingnone given

    Electricity infrastructure has no significant effect on manufacturing value added.

    “electricity | | | -0.137 | | |”
    Quote in the paperNot a substantial claim

  • May combine two claims.

    Findingown data

    When human capital is the modulating variable, its interaction with infrastructure produces a positive direct effect and a negative indirect effect on industrialisation in Africa.

    “When human capital is considered as modulating variable, it interaction with infrastructures produces a positive direct effect and a negative indirect effect.”
    • Also stated in: § V. Conclusion and Policy implications · plain
      “When human capital was considered as modulating variable, it interaction with infrastructures produced a positive direct effect and a negative indirect effect.”
    Quote in the paperSubstantial claim

  • The quote only partly states this claim.

    Findingown data

    ICT infrastructure has a negative and significant effect on manufacturing value added.

    “Ict | | | | -1.202* | |”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Findingown data

    When alternative infrastructure measures are used, the net effect is negative for the transport index and positive for the ICT index up to human development index thresholds of 1.685344 for transport and 2.13499 for ICT, at which these effects are nullified.

    “When alternative measures of infrastructures are used, it produces rather a negative net effect for transport index and a positive net effect for ICT index up to a human development index threshold of 1.685344 and 2.13499 respectively for transport and ICT.”
    • Also stated in: § V. Conclusion and Policy implications · plain
      “When alternative measures of infrastructures were used, it produced rather a negative net effect for transport index and a positive net effect for ICT index up to a human development index threshold of 1.685344 and 2.13499 respectively for transport and ICT when these effects are nullified.”
    Quote in the paperSubstantial claim

  • The quote only partly states this claim.

    Findingown data

    Transport infrastructure has a positive and significant effect on manufacturing value added.

    “transport | | 0.391** | | | |”
    Quote in the paperSubstantial claim

  • Probably not a substantial claim: may not pass S1 (asserted), S3 (load-bearing).

    Findingown data

    The interaction between water and sanitation infrastructure and human capital has no significant effect on manufacturing value added.

    “Wss*hc | | | | | -0.134 |”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S1 (asserted), S3 (load-bearing), S4 (based). The quote only partly states this claim.

    Findingnone given

    Water and sanitation infrastructure has no significant effect on manufacturing value added.

    “Wss | | | | | 0.226 |”
    Quote in the paperNot a substantial claim

  • The quote only partly states this claim.

    Findingown data

    The human capital threshold for the AIDI effect on manufacturing value added is 1.90406.

    “Threshold | 1.90406 | 1.685344 | ---- | 2.13499 | ---- |”
    Quote in the paperSubstantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

    Study design and conductnone given

    The results present both first and second order autocorrelation of residuals.

    “The results present the presence of both first and second order autocorrelation of residuals.”
    Quote in the paperNot a substantial claim

  • May combine two claims.

    Study design and conductcitation

    The data have more cross-sections (33 countries) than time periods (17 years), satisfying the necessary condition for system GMM.

    “Following Rodman (2009) the necessary condition for the application of the GMM methodology is that the number of cross-sections should be more than the time dimension.This is exactly the nature of our data as we are disposed of 33 countries and over 17 years.”
    Quote in the paperSubstantial claim0 of 1 sources checked
    • cites Rodman (2009)

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

  • Classified as probably not a substantial claim.

    Study design and conductnone given

    The number of instruments is less than the number of cross-sections in all specifications.

    “To resolve these, we ensure that the number of instruments is less than the number of cross-sections.”
    • Also stated in: § IV. Results and discussion · plain
      “Besides the number of instruments are in all cases less than the number of cross-sections.”
    Quote in the paperSubstantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

    Study design and conductreasoning

    The analyses focused on the Hansen test rather than the Sargan test because the latter is not robust and not weakened by many instruments.

    “Our analyses however focused on Hansen test than Sargan test because the latter is not robust and not weaken by so many instruments.”
    Quote in the paperNot a substantial claim

  • May combine two claims.

    Interpretationown data

    The estimated thresholds lie within the range of values of the modulating variables in the summary statistics, giving the results policy significance.

    “These results have policy significance as the thresholds are within the range of values of the modulating variables apparent in the summary statistics.”
    Quote in the paperSubstantial claim

  • Classified as probably not a substantial claim.

    Premisecitation

    Industrialization strategies were unsuccessful in Africa with a few exceptions.

    “Unfortunately, with a few exceptions, industrialization strategies were unsuccessful in Africa (Griffin, 1989).”
    Quote in the paperSubstantial claim0 of 1 sources checked
    • cites Griffin, 1989

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

  • Classified as probably not a substantial claim.

    Premisecitation

    Financial development is a key factor in economic performance.

    “According to Levine (2005), financial development is a key factor in economic performance.”
    Quote in the paperSubstantial claim0 of 1 sources checked
    • cites Levine (2005) source

  • Probably not a substantial claim: may not pass S1 (asserted), S3 (load-bearing).

    Premisecitation

    FDI inflows did not have a significant effect on industrialisation in Africa.

    “Gui-Diby and Renard (2015) argued that FDI inflows did not have a significant effect on industrialisation in Africa.”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Gui-Diby and Renard (2015) source

  • Classified as probably not a substantial claim. May combine two claims.

    Premisecitation

    Import trade, economic growth and financial sector development boost industrialisation.

    “In this respect, they argue that import trade, economic growth and financial sector development boost industrialisation.”
    Quote in the paperSubstantial claim0 of 1 sources checked
    • cites Gui-Diby and Renard (2015) source

  • Classified as probably not a substantial claim. May combine two claims.

    Premisecitation

    Trade openness, market size (GDP) and financial development explain industrial development in African countries.

    “Rather, trade openness, market size (GDP) and financial development explain industrial development in these countries.”
    Quote in the paperSubstantial claim0 of 1 sources checked
    • cites Gui-Diby and Renard (2015) source

  • Classified as probably not a substantial claim.

    Interpretationreasoning

    Financial development could present itself as a mediator between the development of infrastructures and the structural transformation of an economy.

    “In view of its importance, financial development could present itself as a mediator between the development of infrastructures and the structural transformation of an economy.”
    Quote in the paperSubstantial claim
    • Rests on an assumption: Progress in the manufacturing sector is meaningless without structural change through appropriate infrastructure financing.

  • Classified as probably not a substantial claim.

    Premisecitation

    The development of the financial sector contributes to a better allocation of financial resources through channelling savings towards productive investment projects without substantial risk of asymmetric information.

    “As Levine (2005), Ndikumana (2003) believes that the development of the financial sector contributes to a better allocation of financial resources through the channelling of savings towards productive investment projects without substantial risk of asymmetric information.”
    Quote in the paperSubstantial claim0 of 1 sources checked
    • cites Ndikumana (2003) source

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Institutional quality has a positive effect on industrialisation in Sub-Saharan Africa.

    “Totouom et al. (2019) aggregating institutions as a composite index posit that institutional quality has a positive effect on industrialisation in Sub-Saharan Africa.”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Totouom et al. (2019)

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Good infrastructures are essential for human capital development.

    “Francisco and Tanaka (2019) argue that good infrastructures are essential for human capital development.”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Francisco and Tanaka (2019) source

  • Classified as probably not a substantial claim. May combine two claims.

    Premisecitation

    Governance and human capital enhance industrialisation in Africa.

    “Samouel and Aram (2016) argued that governance and human capita enhance industrialisation in Africa.”
    Quote in the paperSubstantial claim0 of 1 sources checked
    • cites Samouel and Aram (2016)

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

  • Probably not a substantial claim: may not pass S1 (asserted), S3 (load-bearing).

    Premisecitation

    Industrialisation through value added is boosted by FDI.

    “Nkoa (2016) on his part argue that industrialisation through value added is boosted by FDI.”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Nkoa (2016)

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Romer's (1990) model allows for increasing returns by assuming that human capital has a significant positive effect on output at the industry level.

    “While, Romer's (1990) model allows for increasing returns by assuming that the human capital has a significant positive effect on output at the industry level.”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Romer's (1990) source

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Prior studies have found that infrastructure has a positive and significant impact on manufacturing productivity.

    “Rietveld, Kameo et al. (1994) examined the impact of roads, telecommunications and electricity on the development of manufacturing industries and found a positive and significant impact of infrastructure on the productivity of the manufacturing sector.”
    • Also stated in: § V. Conclusion and Policy implications · plain
      “Sahoo et al. (2010), they studied the effect of electricity, energy, telephone, roads, railways and ports on manufacturing output and found that public infrastructure has a positive and significant effect on the growth of manufacturing productivity.”
    Quote in the paperNot a substantial claim0 of 2 sources checked
    • cites Rietveld et al. (1994) source
    • cites Sahoo et al. (2010)

  • Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

    Premisenone given

    The central role of infrastructure development in accelerating manufacturing sector performance has been recognized in the literature.

    “Overall, although the central role of infrastructure development in accelerating the performance of the manufacturing sector has been recognized in the literature, some findings suggest that infrastructure has a negative impact on industrialization.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

    Premisenone given

    Some findings in the literature suggest that infrastructure has a negative impact on industrialization.

    “Overall, although the central role of infrastructure development in accelerating the performance of the manufacturing sector has been recognized in the literature, some findings suggest that infrastructure has a negative impact on industrialization.”
    Quote in the paperNot a substantial claim
38 of 38

  • The paper relies on this without support.

    Most industries in Africa are multinationals or owned by western nationals, and they often bring in their nationals to head these firms.

    “Most industries in Africa are multinationals or own by western nationals.Most often than not, they bring in their nationals to head these firms.”

  • The paper relies on this without support.

    Progress in the manufacturing sector is meaningless without structural change through appropriate infrastructure financing.

    “Progress in the manufacturing sector is meaningless without structural change through appropriate infrastructure financing.”

  • The paper relies on this without support.

    Health infrastructure improves population health outcomes and educational infrastructure enhances educational quality.

    “Health infrastructures would improve on the health outcome of the population and educational infrastructures on their part will enhance educational quality.”

  • The paper relies on this without support.

    Skilled and healthy individuals are required to operate manufacturing and other industrial operations.

    “Skilled and healthy individuals are required to operate manufacturing and other industrial operations.”

  • The paper relies on this without support.

    ICT infrastructure requires high-skilled labour for its operation and proper functioning towards industrial operations.

    “Besides, some specific infrastructures like the ICT infrastructures require high skilled labour for the operation of these infrastructures for proper functioning towards industrial operations.”

  • The paper relies on this without support.

    Health and education infrastructures contribute to the enhancement of human capital required for taking up industrial positions.

    “Health and education infrastructures contribute in the enhancements of human capital require taking up industrial positions.”
6 of 6

Self-check

Percentages, sums and reported differences re-computed from the paper’s own numbers.

Each contradiction between two passages listed here was confirmed by an independent check.

  • The reported AIDI net effect has the wrong sign

    Major

    At the stated mean financial-development value of 23.754, the reported coefficients give −0.180 + 0.00130 × 23.754 = −0.1491198, not the positive net effect of 0.01288. The footnote's own equation therefore conflicts with the table's reported result.

  • The human-capital ICT effect is described with the opposite sign

    Major

    Table 4 reports an ICT net effect of −0.15651, but the discussion describes that effect as positive below the stated threshold. Its coefficients also imply a negative effect below the threshold and a positive one above it.

  • The financial-development ICT net effect changes sign between table and text

    Minor

    Table 3 reports a positive ICT net effect of 0.46921, whereas the discussion calls it negative. The ICT coefficients evaluated at the stated mean of 23.754 give approximately −0.07529, supporting the negative sign rather than the tabulated positive value.

  • The industrial-value-added outcome has conflicting denominators

    Minor

    Table 2 labels IVAK as value added per capita, while the variable definition identifies it as value added per worker. Those are different dependent-variable measures.

4 of 4

Cites

Flagged first, then by citations

Research works printed but not linked: 5

  1. Barro, 1990, Government spending in a sjmple model of endogenous growth, Journal of Political Economy, 98
  2. Krugman, 1980, Scale economies, product differentiation, and the patterns of trade, American Economic Review, 70
  3. Nkoa, 2016, Foreign direct investment and industrialization of Africa: A new approach, Innovations, 3, 173
  4. Steenkamp, 2017, Can Africa grow its manufacturing sector and create jobs?, World Bank Blocks
  5. Umofia, 2018, Infrastructural development and the Nigerian industrial sector performance, International Journal of Scientific Engineering and Research, 9, 331

Cited by

Sorted by citations

Related

Authors
Nkemgha, G. Z., Nchofoung, T. N., & Sundjo, F.
Affiliations
  • University of Bamenda (CM)
  • Université de Dschang (CM)
Corresponding author
Nchofoung, Tii N.
ORCID
Venue
Cities
Publisher
Elsevier BV
Published
2023-01
Volume
132
Pages
104108
ISSN
0264-2751 (ISSN-L)
DOI
10.1016/j.cities.2022.104108
OpenAlex
W4309686778
Cited by
58
References
48
Citations by year
2026: 10 · 2025: 10 · 2024: 16 · 2023: 21 · 2022: 1
FWCI
9.65
Type
journal article
Language
en
Open access
Licence
Locations
  • Cities (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • Econstor (Econstor) (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Fiscal Policy and Economic Growth
  • Physical Sciences › Computer Science › Information Systems › Economic Growth and Development
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Productivity
Keywords
infrastructure development, industrialization, financial development, human capital, electricity infrastructure, transport infrastructure, threshold effects, SDG 9, African economies

About these checks

Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.

Claims read by deepseek-v4.1-flash under definition version 3 (extract-v3) on 2026-10-11.

Classified by jev-1.13-20260917 (gold-guideline-v0.2) on 2026-10-11.

Cited sources are checked by gpt-6-sol.

Statistics and arithmetic are recomputed, not judged.

Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.

What counts as a claim ›How we measure confidence ›How we check this ›

Are you an author, or do you see a problem with this page? Request a review