Trade Openness, Institutions and Financial Development in Sub-Saharan Africa

2020 ◽  
Vol 44 (2) ◽  
pp. 29-48
Author(s):  
W.N. Bandura
Keyword(s):  
Financial Development ◽  
Trade Openness ◽  
Sub Saharan Africa ◽  
Sub Saharan

scholarly journals FINANCIAL DEVELOPMENT IN DEVELOPING COUNTRIES

2020 ◽  
Vol 20 (03) ◽  
pp. 2050016
Author(s):  
OBINNA FRANKLIN EZEIBEKWE
Keyword(s):  
Developing Countries ◽  
South Asia ◽  
Financial Development ◽  
Trade Openness ◽  
National Income ◽  
Political Stability ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
Marginal Effect ◽  
Sub Saharan

What are the economic, political, institutional, socio-cultural, and geographical determinants of financial development in developing countries? This paper uses the two-way fixed effects (with clustered standard errors) and annual panel data from 1980 to 2018 for 69 developing countries in sub-Saharan Africa, Middle East and North Africa, East and South Asia, Latin America, and the Caribbean to address this question. The principal component analysis is employed to construct a financial development index based on three financial development indicators. This study builds on the previous studies by introducing new potential determinants of financial development such as the perception of corruption, and by exploring important quadratic and interaction effects. The results show that national income, trade openness, indices of political stability and Polity2 (a democracy score), perception of corruption, the predominant religion in the countries, and geographical factors such as territorial access to the sea explain the differences in the levels of financial development across countries and regions. A rise in national income leads to a higher level of financial development and countries with a high perceived level of corruption have a lower level of financial development. There is strong evidence of threshold effects as trade openness has a diminishing marginal effect on financial development while the auxiliary growth regressions show that financial development has an increasing marginal effect on national income. Of the five regions studied, East and South Asia and sub-Saharan Africa have the highest and lowest levels of financial development, respectively. Also, fuel-exporting countries, least developed countries, and landlocked countries tend to have lower levels of financial development. These results have relevant policy implications for developing countries in their continued efforts to achieve better financial development and ultimately, sustainable economic development.

scholarly journals Financing innovative development of the African economies: the role of digitalization and financial innovations

2020 ◽  
Vol 28 (3) ◽  
pp. 429-439
Author(s):  
Tijani Forgor Alhassan ◽  
Ahou Julie Kouadio ◽  
Dadson Etse Gomado
Keyword(s):  
Financial Development ◽  
Financial Services ◽  
Positive Relationship ◽  
Financial Innovation ◽  
Sub Saharan Africa ◽  
Innovative Development ◽  
Mobile Banking ◽  
Data Set ◽  
Financial Innovations ◽  
Sub Saharan

The article examines the relationship between financial innovation (mobile banking) variables in sub-Saharan Africa. Mobile banking (also known as mobile money) is one of the main financial innovations in the sub-Saharan region, and it is a system through which non-bank residents (residents without bank accounts, etc.) receive financial services. The overall importance of financial innovation in today’s digital and knowledge-based economy, and indeed, innovative development, inspired this study. Using a partial linear regression model, we analysed the International Monetary Fund data set, the World Bank’s national economic data, and mobile banking data from GSMA for the period from 2011 to 2017. A negative correlation was found between these variables and growth, as well as financial development, but a positive relationship was established between financial development and economic development. This positive relationship re-confirms the argument that financial development affects economic growth. It is recommended that policy makers develop and implement the necessary policy tools that can promote this form of financial innovation, and thus link its benefits to the national economy in general.

scholarly journals Long-Run and Short-Run Effects of Trade Openness on Life Quality in Sub-Saharan Africa

2021 ◽  
Vol 11 (8) ◽  
pp. 72-83
Author(s):  
Guivis Zeufack Nkemgha ◽  
Aimée Viviane Mbita ◽  
Symphorin Engone Mve ◽  
Rodrigue Tchoffo
Keyword(s):  
Trade Openness ◽  
Life Quality ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Pooled Mean Group ◽  
Long Run ◽  
Short Run ◽  
French Colonies ◽  
Sub Saharan ◽  
British Colonies

This paper contributes to the understanding of the other neglected effects of trade openness by analysing how it affects life quality in sub-Saharan African countries over the period 2000–2016. We used two trade openness indicators, namely: Squalli and Wilson index and the rate of trade. The empirical evidence is based on a pooled mean group approach. With two panels differentiated by their colonial origin, the following findings are established: the trade openness variable measured by Squalli and Wilson index has no effect on life quality in the both groups of countries in the short-run. However, it has a positive and significant effect on life quality in the both group of countries in the long-run. The use of the rate of trade confirms the results in the both groups of countries in the long-run. The contribution of trade openness to life quality is 3.27 and 5.19 times higher in the Former British Colonies than that recorded in the Former French Colonies of SSA respectively to the use of Squalli and Wilson index and the rate of trade. Overall, we find strong evidence supporting the view that trade openness promotes life quality in SSA countries in the long run.

scholarly journals THE ROLE OF FINANCIAL DEVELOPMENT AND INSTITUTIONAL QUALITY ON ENVIRONMENTAL SUSTAINABILITY IN SUB-SAHARAN AFRICAN COUNTRIES

2018 ◽  
Vol 6 (9) ◽  
pp. 156-177
Author(s):  
Aliyu Alhaji Jibrilla
Keyword(s):  
Financial Development ◽  
Environmental Sustainability ◽  
Carbon Dioxide Emissions ◽  
Early Stage ◽  
Institutional Quality ◽  
Environmental Conservation ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Pooled Mean Group ◽  
Sub Saharan

This study addresses the question of financial development and institutional quality influence on the environmental sustainability of some 13 countries from the sub-Saharan Africa. Relying upon pooled mean group (PMG) for panel data, we provide evidence which suggest that both financial development and institutional quality are statistically significant determinants of per capita carbon dioxide emissions in the region. More specifically, we found that without healthy institutions and sound financial system sub-Saharan African countries might not avoid environmental degradation experienced by advanced nations during their early stage of economic progress. Our results also support the EKC hypothesis in the region.  In addition, the paper also shows that more openness to FDI inflows is good for the environment across the SSA. These findings suggest the need for institutional and financial service reform that supports robust environmental conservation.

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.

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
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