The technological role in the growth-enhancing financial development: evidence from African nations

Sequel to the fact that technology is critical in driving developing nations' growth process, we analyse its mediating impact in the nexus between financial development and output growth. The study covers the period between 1990 and 2019 across 46 African nations using the dynamic heterogeneous panel. The empirical result reveals that financial development exerts a positive but insignificant long-run influence on Africa's growth while its short-run effect is negative but significant. It also confirms that technology exerts a positive and substantial effect on long run output growth in Africa while it is insignificantly positive over the short run. In addition, evidence reveals that technology is a vital growth stimulator owing to its long-run growth-enhancing impact while interacting with the financial sector. Finally, the result shows a feedback effect between output growth and financial development and technology and the financial sector. Therefore, we recommend appropriate policies regarding the incorporation of high technological inputs.