Digital technological diffusion, institutional quality within the entrepreneurial ecosystem, and sustainable development outcomes in African economies

This study examines the relationships among digital technological diffusion, institutional quality within the entrepreneurial ecosystem, financial development, human capital, and sustainable development outcomes in African economies. Using a balanced panel dataset of 21 African countries from 2015 to 2024 (N = 210), the study employs two-way fixed effects, dynamic System-GMM, panel threshold regression, panel quantile regression, and machine learning validation techniques. Sustainable development is measured using the SDG Index, while digital technological diffusion and institutional quality are proxied by internet usage and regulatory quality, respectively. The findings reveal that digital technological diffusion and institutional quality positively and significantly influence sustainable development outcomes. Financial development and human capital further strengthen these relationships, indicating important complementary effects. Threshold and quantile regression results reveal substantial nonlinearities and heterogeneity, suggesting that the benefits of digitalisation and institutional quality are stronger in economies with higher financial development and stronger sustainability performance. GDP per capita and industrialisation positively affect sustainable development, whereas inflation exerts a negative effect. Machine learning validation using Random Forest and XGBoost broadly supports the econometric findings. Overall, the study highlights the importance of coordinated digital, institutional, financial, and human capital policies for achieving inclusive and resilient sustainable development in Africa.