Financial development and economic growth: Empirical evidence from Sub‐Saharan Africa

2020 ◽  
Author(s):  
Kong Yusheng ◽  
Jonas Bawuah ◽  
Agyeiwaa O. Nkwantabisa ◽  
Samuel O. O. Atuahene ◽  
George O. Djan
Keyword(s):  
Economic Growth ◽  
Empirical Evidence ◽  
Financial Development ◽  
Sub Saharan Africa ◽  
Sub Saharan

scholarly journals The Nexus between Financial Development and Economic Growth: Panel Data Evidence from Developing Countries

2021 ◽  
Vol 14 (10) ◽  
pp. 489
Author(s):  
E. M. Ekanayake ◽  
Ranjini Thaver
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Panel Data ◽  
Least Squares ◽  
Financial Development ◽  
Panel Cointegration ◽  
Sub Saharan Africa ◽  
Explanatory Variables ◽  
Cointegration Tests ◽  
Sub Saharan

The objective of this study is to investigate the nexus between financial development (FD) in economic growth (GROWTH) in developing countries. The study uses panel data from 138 developing countries during the period 1980–2018. The relationship between financial development and economic growth is investigated using four explanatory variables that are commonly used to measure the level of financial development and several other control variables, including a dummy variable representing the financial and banking crises. The sample of 138 developing countries is also classified into six geographic regions. We have carried out panel unit-root tests and panel cointegration tests before estimating the specified models using both Panel Least Squares (Panel LS) and Panel Fully Modified Least Squares (FMOLS) methods. In addition, panel Granger causality tests have been conducted to identify the direction of causality between FD and GROWTH for each of the regions. The results of the study provide evidence of a direct relationship between FD and GROWTH in developing countries. Furthermore, there is evidence of bi-directional causality running from FD to GROWTH and from GROWTH to FD in samples of Europe and Central Asia, South Asia, and all countries, but not in East Asia and Pacific, Latin America and the Caribbean, Middle East and North Africa, and Sub-Saharan Africa.

scholarly journals Financial development and economic growth: literature survey and empirical evidence from sub-Saharan African countries

2011 ◽  
Vol 12 (1) ◽  
pp. 11-27 ◽  
Author(s):  
Songul Kakilli Acaravci ◽  
Ilhan Ozturk ◽  
Ali Acaravci
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Banking Sector ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Real Gdp ◽  
Long Run ◽  
Domestic Credit ◽  
Real Gdp Per Capita ◽  
Sub Saharan

In this paper we review the literature on the finance-growth nexus and investigate the causality between financial development and economic growth in Sub-Saharan Africa for the period 1975-2005. Using panel co-integration and panel GMM estimation for causality, the results of the panel co-integration analysis provide evidence of no long-run relationship between financial development and economic growth. The empirical findings in the paper show a bi-directional causal relationship between the growth of real GDP per capita and the domestic credit provided by the banking sector for the panels of 24 Sub-Saharan African countries. The findings imply that African countries can accelerate their economic growth by improving their financial systems and vice versa.

DOES REMITTANCE INFLOW PROMOTE HUMAN DEVELOPMENT IN SUB-SAHARAN AFRICA? AN EMPIRICAL INSIGHT

2021 ◽  
pp. 1-23
Author(s):  
MALAYARANJAN SAHOO ◽  
NARAYAN SETHI
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Human Development ◽  
Financial Development ◽  
Sub Saharan Africa ◽  
Positive Effects ◽  
Long Run ◽  
Cointegration Tests ◽  
Sub Saharan ◽  
Ssa Countries

This paper examines the relationship between human development, remittances and other macroeconomic variables like life expectancy, human capital, FDI, inflation, economic growth and financial development by considering 31 Sub-Saharan African (SSA) countries during the period of 1990–2018. Kao and Fisher residual cointegration tests are applied to check the cointegration among the variables in the long-run. We apply fully modified OLS (FMOLS) and DOLS to show the long-run elasticity of explanatory variables on dependent variable. The result indicates that remittances have a positive and statistically significant effects on human development in SSA region. Similarly, government expenditure, human capital, inflation and economic growth have positive effects on human development in the region. Dumitrescu–Hurlin panel granger causality tests were observed such that there is a unidirectional causality between remittance and human development in SSA countries. However, human development and inflation rate show bi-directional relationship with each other. This paper suggests that public policies can be conceived to promote health, education and income, thereby encouraging and enhancing human development. Policymakers should also rely on other macroeconomic factors, such as government spending and financial development, to stimulate human development in SSA region.

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