Democracy and economic growth in Sub-Saharan Africa: a panel data approach

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.

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The Impact of Institutions on Economic Growth in Sub-Saharan Africa: Evidence from a Panel Data Approach

Frontiers in African Business Research - Studies on Economic Development and Growth in Selected African Countries ◽

10.1007/978-981-10-4451-9_4 ◽

2017 ◽

pp. 63-78

Author(s):

Kokeb G. Giorgis

Keyword(s):

Economic Growth ◽

Panel Data ◽

Sub Saharan Africa ◽

Sub Saharan ◽

The Impact

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The Effect of Financial Sector Development on Economic Growth of Selected Sub-Saharan African Countries

Journal of Economics Business and Accountancy Ventura ◽

10.14414/jebav.v23i2.1967 ◽

2020 ◽

Vol 23 (2) ◽

Author(s):

Dagim Tadesse Bekele ◽

Adisu Abebaw Degu

Keyword(s):

Economic Growth ◽

Panel Data ◽

Private Sector ◽

Financial Institutions ◽

Adult Population ◽

Financial Sector ◽

Dynamic Panel Data ◽

Sub Saharan Africa ◽

Financial Sector Development ◽

Sub Saharan

Finance-growth nexus is among the main debatable issue in economics and policymaking. So, this research tried to look at the effect of financial sector development on the economic growth of 25 sub-Saharan Africa countries by using panel data for time 2010-2017. Precisely, three dynamic panel data models which look the effect of financial sector depth, access and efficiency on economic growth were estimated by two-step system GMM estimation. In this research, credit extended to the private sector per GDP, commercial bank branch per 100,000 adult population, and Return to assets were used as a proxy for financial sector depth, access, and efficiency, respectively. Accordingly, the results revealed financial sector depth, access, and efficiency have a positive and statistically significant effect on the economic growth of these countries. It is therefore recommended for the concerned bodies that broadening the depth of financial institutions by giving more credit for the private sector is essential. Besides, the financial institutions will have to be expanded to increase their accessibility to the mass and have to take some measures which promote their efficiency.

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