Bridging technology divide to improve business environment: Insights from African nations

Bridging the technology divide remains one of the contemporary business issues, yet limited scholarly attention has been devoted to exploring the gap between regional developing nations and their effects on can be bridged. The study examined the state of technological progress in Africa by applying an innovative two-step total factor productivity (TFP) analysis. We first estimated the TFP for 21 African countries with reference to South Africa (regional leader) and the United States (US)(international leader). We then applied the Phillips and Sul (2007) panel convergence tests. We found three convergence clubs with TFP levels relative to South Africa, where only most developed African countries have been able to catch-up. In the case of TFP levels relative to the US, we found two convergence clubs and only a couple of countries have managed to make short-lived progress of catching-up. Our analysis has implications in terms of capitalising on new technology for new businesses to flourish and accelerate the pace of change leading to the weeding-out of inefficient firms.