The Mediation and Moderation Roles of Institutional Quality in the Nexus of Economic Openness and Structural Transformations in Sub-Saharan African Countries

This research examines the impact of institutional quality on the relationship between economic openness and economic structural transformation in Sub-Saharan Africa. The goal is to find ways to help these countries grow economically. Using information from 18 Sub-Saharan African countries between 1996 and 2020, the research uses instrumental variable methods and structural equation models to deal with the instrumental, moderator, and mediator roles of institutional quality and ensure the results are reliable. The results show that the quality of institutions has a big effect on how economic openness impacts structural change. Better corruption control and government effectiveness have a negative impact on trade and foreign investment in economic change. On the other hand, political stability, the rule of law, and good rules reduce these negative effects. The study finds that increased trade openness can trap countries in a state of relying on commodities, which slows down progress. These results mean a lot for Sub-Saharan Africa. Government leaders should focus on improving institutions, especially government rules and anti-corruption efforts. By creating a supportive institutional quality, Sub-Saharan African countries can take advantage of the benefits of economic openness to achieve everlasting change. This research shows how important institutional quality is for economic policies, pointing out that better governance can lead to better integration into the world economy, promoting long-term economic growth and stability. This study adds to what we know about economic progress in Sub-Saharan Africa, giving leaders ideas on how to handle the complicated relationships between institutional quality, economic openness, and structural change.