This paper examines the extent to which dependence on primary
commodities in Sub-Saharan African(SSA) countries can be explained by
low levels of absorptive capacity (the ability to acquire, internalize
and utilize knowledge developed elsewhere). We examine the individual
and combined effects of various indicators of absorptive capacity on
export diversification. We test the significance of these effects on a
sub-sample consisting of SSA countries and a sample of other developing
countries. Our results show that the association between higher levels
human capital and basic infrastructure -two crucial components of
absorptive capacity -with more export diversification is subject to
threshold level effects, while the abundance of natural resources turns
out to be impeding diversification in SSA. These results imply that SSA
countries need to substantially increase their investments in basic
infrastructure as well as reinforce the accumulation pace of human and
physical capital to allow active technological learning and reduce their
dependence on primary commodities.
Keywords: absorptive capacity, human capital, capital accumulation, export diversification, Sub-Saharan Africa.
JEL Classification: O13, O33, O55.
UNU-MERIT Working Papers ISSN 1871-9872