Transitions towards green productivity in Africa: Do sovereign debt vulnerability, eco‐entrepreneurship, and institutional quality matter?

Abstract

Improving green productivity (GP) is critical for achieving global sustainable green development. Yet, past efficiency studies on the African continent have ignored Africa's GP, estimation, and driving factors. Specifically, the role of sovereign debt vulnerability, environmental entrepreneurship, and institutional quality in ensuring Africa's green productivity development is lacking. Therefore, this study built a meta‐frontier biennial weighted modified data envelopment analysis (DEA) model to evaluate green productivity across resource‐intensive and non‐resource‐intensive African countries from 2010 to 2019. Further, the study adopted the global Malmquist‐Luenberger productivity index (GML) to investigate the dynamic changes in African green productivity growth. The results suggest that only a few African countries are efficient, implying more room for improvement for the other countries. The heterogeneity of green productivity across the resource's classification exhibits significant disparity. The technology gap also prevails among the two resource classifications of African countries. The GML index indicates that Africa's green productivity is mainly explained by technical change instead of efficiency change. The bootstrap truncation regression suggests an inverted U‐shaped nexus between growth and green productivity in Africa and resource‐intensive countries (RIC). Green environmental entrepreneurship positively affects green productivity in Africa. On the components of institutional quality, we observed that the rule of law positively influences green productivity in non‐resource‐intensive countries (NRIC) and the whole of Africa. In contrast, political stability, government effectiveness, voice and corruption negatively affected green productivity in NRIC. Also, foreign direct investment (FDI) and sovereign debt vulnerability negatively correlate to green productivity in Africa as a whole and NRIC, respectively. The findings of this study aid in raising awareness of green productivity in developing countries, which is crucial in boosting global green development.