Financial development and comparative advantage: the effect of financial development on manufacturing export in Africa

The aim of this paper is to assess the effect of financial development on manufacturing export in Africa in 30 countries from 2000 to 2021, accounting for endogeneity of variables using a new novel xtdpdgmm command that implements two-step system GMM (Generalised Method of Moment) estimators. According to the empirical results, financial development significantly influences the manufactured export having a negative sign and pointing out that financial sector development lowers African manufacturing export. Designing policy frameworks that encourage export, promote industrial development, and create better environment for long-term sustainable growth should redirect the financial sector so that that sector is veritable mean to shift economic structure toward manufacturing development.