Moving Towards Shared Prosperity : Examining the Linkage Between Economic Complexity, Renewable Energy and Inclusive Growth in Africa

A country’s productive structure and access to energy are critical to achieve sustainable development across countries. However, the existing studies on the economic complexity-inclusive growth nexus and how this relationship is moderated by renewable energy are lacking making it imperative to conduct further empirical research. This study, therefore, explores the relationship between economic complexity and inclusive growth and how this relationship is moderated by renewable energy consumption and biomass energy consumption. The study samples 22 Sub-Saharan African countries over the period 2000–2017 and employs Driscoll-Kraay standard errors and System GMM regression methods. The results indicate that economic complexity enhances inclusive growth. This study also indicates that while renewable energy consumption enhances inclusive growth, biomass energy consumption negatively affects inclusive growth. Further, increasing renewable energy consumption leads to beneficial effects of economic complexity in promoting inclusive growth. Besides, countries with an increased share of biomass energy consumption benefit less from economic complexity in achieving inclusive growth. In light of these empirical findings, renewable and biomass energy consumption should be considered key policy variables if economic complexity is to be used as an economic tool for achieving sustainable development