scholarly journals Financial inclusion, bank competition and economic growth in Africa

2021 ◽  
Vol 14 (1) ◽  
Author(s):  
Tough Chinoda ◽  
Tafirei Mashamba
Keyword(s):  
Economic Growth ◽  
Panel Data Analysis ◽  
Financial Inclusion ◽  
Bank Competition ◽  
African Countries ◽  
Information Hypothesis ◽  
Long Run ◽  
Short Run ◽  
Managerial Implications ◽  
Value Add

Orientation: The relevance of bank competition and economic growth for boosting financial inclusion is attracting unprecedented attention from academics and policymakers, mainly because of several persisting issues which, if addressed, can enhance the functionality of governments, businesses, individuals and the economy.Research purpose: The study aims to examine the interplay between financial inclusion, bank competition and economic growth in Africa.Motivation for the study: Previous literature focuses mainly on the nexus between financial inclusion and bank competition, financial inclusion and economic growth and bank competition and economic growth producing diverse results, with a dearth of literature on the trivariate link between the three variables.Research approach/design and method: This study employed the pooled mean group estimation-based panel autoregression distribution lag approach from 2004 to 2018. A panel data analysis for 20 African countries was used.Main findings: The study found a significant positive relationship between financial inclusion and economic growth in the long run. However, in the short run, economic growth significantly reduces financial inclusion. We also found that in the long-run bank competition reduces financial inclusion in line with the information hypothesis. However, in the short run the effect is significantly positive, consistent with the market power hypothesis.Practical/managerial implications: Policymakers and development agencies should implement measures that reckon incentives that can accelerate bank competition to bring on-board the unbanked. They should also take note of financial inclusion measurement in addressing financial inclusion challenges. Moreover, they should minimise barriers to financial inclusion to enhance bank competition and stability.Contribution/value-add: The study managed to discover how bank competition and economic growth influences financial inclusion.

scholarly journals Institutions, Macroeconomic Policies and Economic Growth in Africa: Evidence from Panel Data

2019 ◽  
Vol 5 (2) ◽  
pp. 112
Author(s):  
Haruna M. Aliero ◽  
Muftau Olaiya Olarinde
Keyword(s):  
Economic Growth ◽  
Growth Performance ◽  
Panel Cointegration ◽  
Growth Strategy ◽  
African Countries ◽  
Macroeconomic Policies ◽  
Long Run ◽  
Short Run ◽  
Capital Development ◽  
Poor Management

This study investigates the effects of institution and macroeconomic policy on economic growth in Africa, using panel Cointegration technique to analysed data obtained from a panel  of 50 African Countries covering a period of 25years (1990-2014). The results confirm that declining growth rate in Africa is due to poor management of macroeconomic policies. A weak turning point is also confirmed to exist for government size in the short run; in the long run it becomes more pronounce. The Wald restrictions tests of causality ascertain that institutions lead economic growth performance in the short run, while poor economic growth performance impaired the capacity required in building strong institutions which in turn stunts growth in the long run. Therefore, African leaders should tilt their expenditure in favour of human capital development and strong institution, ensure intra-regional trade and adopt private sector led – economic growth strategy.

scholarly journals Public Debt and Economic Growth in Niger: An Autoregressive Distributed Lag Approach

2020 ◽  
Vol 1 (2) ◽  
pp. 56-65
Author(s):  
Issoufou Oumarou
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Unit Root Test ◽  
Annual Data ◽  
African Countries ◽  
Policy Makers ◽  
Significance Level ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

Purpose: The aim of the paper is to examine the existence or not of a long run or a short run relationship between public debt and economic in Niger and investigate the significance of this relationship. Approach/Methodology/Design: The study first applied time series econometrics tests such as Augmented Dickey-Fuller (ADF) unit root test, Bound cointegration test and Auto Regressive Distributed Lag (ARDL) on annual data obtained from the International monetary fund (IMF) and the West African States Central Bank (BCEAO). The observations cover the period from 1970 to 2019. The study then performed some residual tests including serial correlation, normality and heteroskedasticity for the accuracy of the prediction of the model. Findings: The empirical results showed no long run relationship between public debt and economic growth in Niger. The short run analysis revealed that public debt and budget balance have short run causal effects on economic growth in Niger. The coefficients are significant at 10% significance level. Practical Implications: This article gives valuable information to Niger policy makers regarding the effects of public debt on Niger economic growth. The article highlights the effects that public debt has on economic growth in Niger in the short and long run. Therefore helping policy makers decide whether to increase or reduce the borrowing trend. Originality/value: The results of the paper give valuable information on the relationship that public debt may have with economic growth in Sub Saharan African countries with the similar macroeconomic indicators with Niger.

scholarly journals Electricity Consumption, Corruption and Economic Growth

2018 ◽  
Vol 6 (4) ◽  
pp. 193-214
Author(s):  
Busrat Abidemi Agbaje ◽  
Ekele Idachaba
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Electricity Consumption ◽  
Electricity Price ◽  
African Countries ◽  
Causality Test ◽  
Long Run ◽  
Integration Techniques ◽  
Short Run ◽  
Electricity Infrastructure

An important prerequisite for reducing poverty, sustainable development and achievement of the millennium development goal has to some extent been tied to access to electricity. However, the subject matter; 'electricity consumption causing economic growth' has seen conflicting results from the theoretical and empirical front, if indeed a relationship exist at all. The study tests, within a panel context the long-run relationship between electricity consumption and economic growth for 13 African Countries from 2006 to 2017 by employing recently developed panel co-integration techniques. Implementing a three stage approach made up of panel unit root, panel co-integration and Granger causality test to examine the causal relationship between electricity consumption, electricity price, corruption, employment and growth. The study provides empirical evidence that a bidirectional causal relationship between electricity consumption and economic growth exist in the short run, suggesting that lack of electricity could hamper economic growth as well as an investment in electricity infrastructure would in turn improve economic growth. Also reveals that corruption causes the level of electricity consumption and GDP in the short run. On the long-run front electricity consumption and electricity price granger causes GDP and GDP causes electricity consumption.

Bank competition, financial innovations and economic growth in Ghana

2014 ◽  
Vol 5 (1) ◽  
pp. 30-51 ◽  
Author(s):  
Anthony Adu-Asare Idun ◽  
Anthony Q.Q. Aboagye
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Financial Innovation ◽  
Bank Competition ◽  
Content Type ◽  
Financial Innovations ◽  
Long Run ◽  
Short Run ◽  
The Relationship ◽  
Finance Growth Nexus

Purpose – This paper takes the finance-growth nexus further by looking at the relationship between bank competition, financial innovations and economic growth in Ghana. The purpose of this paper is to find the causality among bank competition, financial innovations and economic growth in Ghana. Design/methodology/approach – The relationship between bank competition, financial innovations and economic growth was established through the framework of the endogenous growth model. In addition, the paper employed the bound testing ARDL cointegration procedures to enable us to establish both short-run and long-run relationship between bank competition, financial innovations and economic growth. Granger causality test were also estimated to determine the direction of causality. Findings – The results showed that, in the long run, bank competition is positively related to economic growth while financial innovation is negatively related to economic growth. In the short run, bank competition is negatively related to economic growth. By the same token, financial innovation is positively related to economic growth in the short run. In terms of causality, the results showed that there is unidirectional Granger causality from bank competition to economic growth. However, there is bidirectional Granger causality between financial innovation and economic growth. Practical implications – The study therefore, recommends for more regulations toward a more competitive banking system with more innovative products tailored toward mobilization of savings and investment to growth induced sectors of the economy. Originality/value – This paper provides a time series perspective to the finance-growth nexus and highlights the potential contribution of effective banking development to the economic welfare of the Ghanaian citizens.

scholarly journals Financial Inclusion for Sustainable Economy: Empirical Evidence from Nigeria

2020 ◽  
Vol 17 ◽  
Keyword(s):  
Economic Growth ◽  
Secondary Data ◽  
Wald Test ◽  
Financial Inclusion ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Augmented Dickey Fuller ◽  
Short Run ◽  
Adf Test

The main objective of the study is to empirically examine how economic growth is impacted upon through financial inclusion. Economic growth per capital income is the study’s explained variables while, rural deposits, private sector deposits, rural loans, private loans, and number of banks branches are proxies for the explanatory variable. Secondary data was sourced from the Central Bank of Nigeria statistical bulletin and World Bank financial indicator and span thirty-five years (1982 to 2017). From the augmented dickey fuller (ADF) test results, autoregressive distributed lag (ARDL) regression was adopted. Findings shows that individually, rural deposits, and number of banks branches are significant in the short-run while, only the former is significant in the long-run. However, jointly, and from the Wald test result, a no significant relationship is established between the variables in the long-run. The study thus recommends a nurturing approach from primary to tertiary level of financial inclusion.

ELECTRICITY CONSUMPTION, TRADE OPENNESS AND ECONOMIC GROWTH IN DEVELOPING COUNTRIES: A DISAGGREGATED APPROACH

2021 ◽  
pp. 1-28
Author(s):  
KIZITO UYI EHIGIAMUSOE ◽  
SIKIRU JIMOH BABALOLA
Keyword(s):  
Economic Growth ◽  
Trade Openness ◽  
Electricity Consumption ◽  
Impulse Response Functions ◽  
African Countries ◽  
Cross Sectional ◽  
Long Run ◽  
Short Run ◽  
Cross Sectional Dependence ◽  
Trade And Growth

This study examines the relationship between electricity consumption, trade openness and economic growth in 25 African countries during 1980–2016. It disaggregates electricity into renewable and non-renewable and disaggregates trade into exports and imports. It employs cointegration and Granger causality techniques that enable us to determine both joint and individual causality, as well as account for individual heterogeneity and cross-sectional dependence. It also uses the variance decompositions (VDs) and impulse response functions (IRFs). This study shows a short-run and long-run joint causality from electricity and trade to growth, as well as a short-run and long-run joint causality from trade and growth to electricity. Besides, the Dumitrescu–Hurlin Granger non-causality technique shows a bidirectional causality between electricity and growth and between trade and growth but a unidirectional causality from electricity to trade. It also reveals the causal relationships from exports, imports, renewable and non-renewable electricity to growth. This study implies that electricity consumption and trade openness stimulate growth, while the latter also determines electricity consumption and trade openness. Based on the findings, we recommend some policy options.

scholarly journals Regional Foreign Direct Investment Potential in Selected African Countries

2019 ◽  
Vol 11 (10) ◽  
pp. 66
Author(s):  
Philip Agyei Peprah ◽  
Yao Hongxing ◽  
Jean Baptiste Bernard Pea-Assounga
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Capital Accumulation ◽  
Direct Investment ◽  
Fiscal Decentralization ◽  
African Countries ◽  
Foreign Reserve ◽  
Long Run ◽  
Short Run ◽  
Investment Growth

The recent devolutionary trend across the world has been in part fuelled by claims of a supposed ‘economic growth by direct investment dividend’ associated with the fiscal decentralization. There is however, little empirical evidence to substantiate these claims. Most prior research has determined different research techniques of measurement by generating mix results. More so, these studies do not differentiate between short and long run techniques and mechanisms through which county expenditure affects economic growth, by investment growth, and by foreign reserve of African countries. The background has investigated empirically the short and long run techniques effect of components of county expenditure on economic growth investment, by foreign direct investment growth in the African countries in period of 2013 to 2017. The variables tested by unit root by no stationary at interval levels. The long and short run of variables computed by ARDL methods by Keynesian theory. However, the budget allocation and execution improved to capital infrastructure and like transport communication help to improve private capital accumulation and economic growth.

scholarly journals The Nexus Between Financial Development, Economic Growth and Poverty Alleviation: PMG-ARDL Estimation

ETIKONOMI ◽  
2021 ◽  
Vol 20 (1) ◽  
pp. 1-12
Author(s):  
Benjamin Korankye ◽  
Zuezhou Wen ◽  
Michael Appiah ◽  
Louisa Antwi
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Poverty Alleviation ◽  
Poverty Reduction ◽  
Policy Implications ◽  
Development Economic ◽  
African Countries ◽  
Causality Test ◽  
Long Run ◽  
Short Run

This study aims to find out the connections between financial development, economic growth, and poverty using panel data from 1985 to 2017 in fourteen African countries that many previous researchers ignore. The study deploys a dynamic Granger causality test to trace the nexus between financial development, economic growth, and poverty reduction in Africa in the long run. First, the upshots suggest a gross domestic product, gross capital formation, price of household consumption, and government expenditure substantially impacting poverty. Besides that, the result also shows a bi-directional in the long run using a PMG estimator. The findings broadly support the view that there is a stable, short-run relationship between financial development, economic growth, and poverty in the error correction terms. However, other variables show no causal relationship in the short run. In practicality, this study suggested some policy implications and supported governmental policies to reduce economic hardship on financial institutions.JEL Classification: G10, O47, I39, C33How to Cite:Korankye, B., Wen, X., Appiah, M., & Antwi, L. (2021). The Nexus Between Financial Development, Economic Growth, and Poverty Alleviation: PMG-ARDL Estimation. Etikonomi: Jurnal Ekonomi, 20(1), 1 – 12. https://doi.org/10.15408/etk.v20i1.15908.

scholarly journals Relationship Between Trade Openness, Capital Formation and Economic Growth: A Panel Data Analysis for African Countries

2017 ◽  
Author(s):  
Ahmet Ay ◽  
Fahri Kurşunel ◽  
Mahamane Moutari Abdou Baoua
Keyword(s):  
Economic Growth ◽  
Panel Data Analysis ◽  
Trade Openness ◽  
Capital Formation ◽  
Gdp Per Capita ◽  
Equatorial Guinea ◽  
African Countries ◽  
Long Run ◽  
Integration Test ◽  
Per Capita

The more a country is open to trade, the more it attracts investors and the faster its economy develops. However, some study showed that sometime it can be the opposite of all this. In this context, the main purpose of this study is to investigate the relationship between trade openness, capital formation and economic growth in African countries. To do so, we collected data of GDP per capita, trade (% of GDP), Gross national expenditure and capital formation variables. The method applied is panel cointegration and causality by using time series of 38 African countries for the period of 1990-2014. According to the results there is long run relationship between all the variables and the cross sectional co-integration test result indicates that there is more cointegration in Comoros, Equatorial Guinea, Niger and Guinea-Bissau. With highest GDP per capita, Equatorial Guinea has more long-run relationship between trade openness, capital formation and economic growth. However, one of the poorest countries in the world (Niger), has also efficient long run relationship between the variables. The panel causality test results suggest that there is unidirectional causal relationship from trade openness to economic growth. There is also bidirectional causality link between capital formation and economic growth. In the same context, causal link exists from capital formation to trade openness. The study suggests that African countries must increase the investment promotions in order to increase the capital formation and trade openness then to boost economic growth.

scholarly journals Bank Competition and Economic Growth

2021 ◽  
Vol 10 (1) ◽  
pp. 20-33
Author(s):  
Champika Liyanagamage
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Policy Implications ◽  
Sri Lankan ◽  
Bank Competition ◽  
Negative Effects ◽  
Vec Model ◽  
Long Run ◽  
Long Term Effect ◽  
Short Run

This paper provides rather scares evidence on the nexus between bank competition and economic growth in a unique developing economy; Sri Lanka for the period 1996-2018. The effect of competition in the Sri Lankan banking sector on economic growth, and the mechanisms through which competition affects growth are analyzed in the present paper. The VEC model used in this study was aimed at capturing independently the short and long-term effect of bank competition on economic growth. The competition is measured with Pazar-Ross H- Statistics. Contrary to the common wisdom, the study found evidence for negative effects of bank competition, on economic growth in the short run. However, in the long run, this effect is strong and positive. Further, the statistical results of this paper revealed that higher bank competition channels economic growth through interest rate and bank efficiency. These findings have important policy implications as it gives great insight into the complexity of competition related conduct in developing countries.

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