TITLE:
What Drives Industrialization in SADC? A Multidimensional Panel Analysis
AUTHORS:
Ninquassau Venscellas Anderson Koassi, Mohamed Traoré, Rebecca K. Yeo, Karim Traoré
KEYWORDS:
Industrialization, SADC, LSDVC, Pooled Mean Group, Financial Deepening
JOURNAL NAME:
Modern Economy,
Vol.17 No.10,
October
19,
2026
ABSTRACT: Manufacturing value added in the Southern African Development Community fell from 15.2 to 11.1 per cent of GDP between 2002 and 2023, and declined in ten of thirteen member states, even as urbanization rose by nine percentage points: the premature deindustrialization pattern documented by Rodrik (2016). We ask which of four policy dimensions, namely external capital, urbanization, institutional quality and financial deepening, accounts for within-country variation in the manufacturing share, and whether the answer survives a graded estimator hierarchy running from pooled OLS through static and bias-corrected dynamic fixed effects to pooled mean group cointegration. Private credit deepening carries a negative coefficient that controls for country effects and is significant in five of the seven specifications, while the sign of urbanization is determined entirely by whether common time effects are removed. Industrial finance policy in the region should target the composition of credit rather than its volume. And the spatial patterns matter.