Does Globalization Enhances Product Sophistication?

Despite the widespread of economic, social and political globalization around the world, the productive structure of African economies remains low compared to any other developing region. Does it mean that globalization has no significant effects on economic sophistication in that setting? The main aim of this study is to give answers to these queries using the case of 27 African countries over the 1996–2017 period. Using static and dynamic empirical estimations based on pooled OLS and system GMM, we find that globalization enhances economic sophistication. Accounting for the dimensions of globalization, the results show that economic and political globalization matter for enhancing economic sophistication. Further decomposing of economic and social globalization indicate that financial globalization, trade openness, FDI enhance economic sophistication, while internet usage negatively affects economic sophistication. Policies to sustain the global integration pathway can enhance the diversity and sophistication of products in Africa countries