Interactive Effects of Anti‐Globalization Dynamics and Environmental Degradation on Africa's Productive Capacity

Abstract

ABSTRACT The rise of anti‐globalization forces and the escalating impacts of environmental degradation have emerged as two dominant global forces that increasingly disrupt economic prosperity. Despite growing scholarly interest in this subject, no empirical study has examined the joint implications of these two forces on productive capacity. To address this gap, this study employs the interactive generalized method of moments to investigate the interactive impact of anti‐globalization dynamics and environmental degradation on the productive capacity of 52 African countries between 2005 and 2022. Anti‐globalization is examined through the associated risks across the economic, political, social, and financial dimensions of globalization. These risks are quantified by estimating standard errors from first‐order autoregressive AR (1) processes for each globalization indicator. The study presents the following key findings: (i) an unconditional negative impact of environmental degradation on productive capacity, and (ii) a negative synergy between the interaction of anti‐globalization and environmental degradation, indicating that anti‐globalization amplifies the adverse effect of environmental degradation on productive capacity. In alignment with several United Nations Sustainable Development Goals, the study recommends channeling investments toward productivity‐enhancing sectors with strong green potential and strengthening engagement with global climate finance mechanisms to mitigate environmental risks while protecting the region's productive base.