Beyond growth: How globalization and environmental regulation shape Africa's manufacturing growth-sustainability pathway

Despite decades of manufacturing growth efforts, Africa continues to face persistent challenges in translating manufacturing expansion into broad-based economic growth and sustainable development. This study examines the association between manufacturing growth, economic growth, and sustainable development across up to 54 African countries (2000–2022), employing a fixed effects estimation approach with Driscoll–Kraay standard errors. While the analysis controls for time-invariant country-specific heterogeneity, the findings are associational and should not be interpreted as causal. Empirical samples range from 23 to 34 countries due to data availability for key variables. This study contributes new empirical evidence in three ways. First, unlike prior work examining direct effects, we test globalization and environmental regulation as moderators conditioning the manufacturing growth-sustainability nexus—a relationship not previously assessed across a pan-African sample. Second, we provide comprehensive evidence on how trade openness and regulatory enforcement interact with manufacturing growth to influence adjusted net savings, extending smaller-scale studies. Third, we apply fixed effects with Driscoll–Kraay standard errors to address cross-sectional dependence, autocorrelation, and heteroscedasticity—issues often overlooked in African panel studies. Aligned with Kaldor's growth law, the study finds that manufacturing growth significantly boosts economic growth. However, its contribution to sustainable development is conditional. Positive effects on sustainability are observed when manufacturing growth is accompanied by higher levels of globalization. Stricter environmental regulations weaken the negative association but do not generate positive effects within the observed range. The findings emphasize that manufacturing expansion alone is insufficient. An integrated policy framework is essential, combining industrial policy with trade openness and robust environmental governance. For inclusive and resilient growth, African policymakers must prioritize global integration and enforce environmental standards alongside industrial promotion. Robustness checks using common sample, common correlated effects (CCE) estimator, lagged regressors, and outlier treatment confirm that these findings are not driven by sample composition or extreme observations, though the CCE results indicate estimator sensitivity.