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The study investigates the influence of digitalization, globalization, natural resources, public investment, and institutional quality on economic growth in landlocked African countries.

January 25, 2026Open Access

Digitalization, globalization, natural resources and institutions: implications for economic growth in landlocked African countries

Key Points

The study investigates the influence of digitalization, globalization, natural resources, public investment, and institutional quality on economic growth in landlocked African countries.
Analyzed panel data from 15 African landlocked countries from 1996 to 2023.
Employed dynamic fixed effects with lagged dependent variables and internal lag instruments.
Utilized Driscoll–Kraay standard errors for robustness in findings.
Incorporated interaction terms to explore the interplay between institutional quality and growth drivers.
Income shows high persistence, with a lagged dependent variable of 0.65 indicated in semi-log models.
Digitalization and institutional quality consistently have positive effects on economic growth.
Globalization has a modest initial impact but is enhanced by stronger institutional frameworks.
Public investment positively influences growth, while natural resource rents and the labor force show weak effects.

Abstract

Purpose This study aims to examine how digitalization, globalization, natural resources rent (NRR), public investment and institutional quality shape gross domestic product per capita in 15 African landlocked countries (LLDCs) from 1996 to 2023 and whether institutions condition the growth returns to digitalization and globalization. Design/methodology/approach Using a balanced panel dataset, the analysis employs dynamic fixed effects with a lagged dependent variable and internal lag instruments (panel instrumental variable/two-stage least squares), complemented by including Driscoll–Kraay and panel-corrected standard errors for robustness. Both level and semi-log specifications are estimated, incorporating lagged regressors and interaction terms to explicitly capture complementarities between institutional quality and structural drivers. Findings The results reveal that income is highly persistent (lagged dependent variable 0.65 in semi-log). Digitalization and institutional quality exert consistently positive and significant effects on economic growth. While globalization's standalone impact is modest, its effect is substantially strengthened in the presence of stronger institutions. Lagged public investment supports growth, whereas NRR and the labor force exhibit weak, inconsistent effects. The results support a complementarities narrative in which institutional capacity is a prerequisite for translating digital adoption and external integration into higher living standards in landlocked contexts. Originality/value Focusing exclusively on African LLDCs, this study is among the first to jointly assess digitalization and globalization through the lens of institutional moderation. By establishing that institutional quality conditions the effectiveness of digital and global openness strategies and highlighting the conditional role of investment and the limited contribution of resource rents, the findings offer policy-relevant evidence on reform sequencing for structurally disadvantaged economies.

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