Effect of Human Capital on Economic Complexity in Africa: A Study of the Moderating Role of Governance Institutions

This study examines how domestic institutional characteristics shape the effect of human capital on economic complexity. The study applies the Driscoll–Kraay fixed-effects estimation method to panel data from thirty-seven African countries (2011–2022). Results show that while human capital positively influences economic complexity, weak governance institutions diminish this effect. Among institutional dimensions, only control of corruption and rule of law significantly strengthen the impact of human capital. These findings underscore the context-specific nature of governance and suggest that policy efforts should prioritize reducing corruption, reinforcing legal frameworks, and aligning governance reforms with industrial and human capital strategies.