Towards innovation in West African business sophistication: Lessons from the Eurozone

Abstract This paper aims to shed light on the key factors that contribute to improving innovation in West African business sophistication by learning from the experience of the Eurozone. We have used panel data from 2013 to 2022 on 15 West African countries and 20 Eurozone countries. The study opted for non-parametric and semi-parametric modelling, estimated through the Generalized Additive Method. The results show that, first, human development in West Africa has not yet reached the minimum threshold required to positively impact innovation in business sophistication. Second, the relationship between human development and innovation in business sophistication in the Eurozone is non-linear, with 0.861 as the minimum threshold at which the Human Development Index positively influences innovation in business sophistication in the Eurozone. Third, political stability and non-violence positively and linearly influence innovation in business sophistication, whether in West Africa or the Eurozone. JEL: C51, M21, O32