Is Globalisation all Good? Asymmetric Analysis of the Roles of Globalisation on Poverty in Africa

ABSTRACT This study examines the asymmetric effect in the globalisation–poverty relationship in Africa from 1980 to 2020, focusing on low‐income and middle‐income countries. It investigates the roles of institutional quality and economic growth in this context. The research employs the Generalised Method of Moments (GMM), dynamic panel threshold analysis, and Method of Moments Quantile Regression (MM‐QR). Findings indicate that in low‐income African countries, globalisation is associated with poverty reduction, as shown by linear regression analysis. However, in middle‐income countries, a threshold at 60% suggests that beyond this point, globalisation does not significantly reduce poverty. The MM‐QR further confirms that globalisation's poverty‐reducing effects are primarily seen around the median income level, rather than across the entire income spectrum. These results underscore the importance of considering income levels when evaluating globalisation's impact on poverty. Policymakers should note that the benefits of globalisation for poverty reduction vary with a country's income level. To maximise globalisation's poverty‐reducing potential, economic growth should be promoted alongside it. This study highlights the need for context‐specific approaches and policies to effectively harness globalisation's benefits for poverty reduction in Africa.