The Role of Institutions in Strengthening Digital Productivity Gains in SADC
Suares Clovis Oukouomi Noutchie · Emile Franc Doungmo Goufo
International Journal of Business Ecosystem & Strategy · 2026 · Vol. 8 / Issue 5 · 673-682
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Abstract
This paper tests whether government effectiveness and regulatory quality amplify the productivity return to digitalisation in the Southern African Development Community (SADC). A fully unrestricted panel combines World Development Indicators, the 2025 Worldwide Governance Indicators revision and Penn World Table 11.0 for 15 economies over 2005–2023. Digitalisation is a principal-component index of internet use, mobile subscriptions and fixed broadband. Separate governance equations avoid mechanical multicollinearity. Country fixed effects with Driscoll–Kraay covariance are compared with pooled dynamic common correlated effects error-correction models. Digitalisation has a positive short-run association in the government-effectiveness equation (0.056; 95% country-cluster interval: 0.008–0.155), while regulatory quality has a positive direct short-run coefficient (0.208; 0.064–0.309). Neither governance measure positively magnifies digital returns. Long-run interaction intervals include zero; the regulatory-quality short-run interaction is negative (−0.069; −0.123 to −0.004), and threshold slope differences are unsupported. Error correction is stable in both equations, and country deletion preserves positive digital coefficients. Institutions remain important direct capabilities, but broad governance scores should not be presumed automatic digital multipliers. Policy should connect specific regulatory and implementation reforms to identifiable adoption constraints rather than relying on general institutional upgrading alone.
Keywords: {'name': 'digitalisation'}, {'name': 'government effectiveness'}, {'name': 'regulatory quality'}, {'name': 'labour productivity'}, {'name': 'Institutions'}, {'name': 'SADC'}
Authors & affiliations
Suares Clovis Oukouomi Noutchie
North-West University
Emile Franc Doungmo Goufo
University of South Africa
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