The impact of inflation on the financial sector development: Empirical evidence from Jordan

Purpose The purpose of this study is to examine the role of reducing information asymmetry (IA) on conditional financial sector development in 53 African countries for the period 2004-2011. Design/methodology/approach The empirical evidence is based on contemporary and non-contemporary quantile regressions. Instruments for reducing IA include public credit registries (PCRs) and private credit bureaus (PCBs). Hitherto unexplored dimensions of financial sector development are used, namely, financial sector dynamics of formalization, informalization, semi-formalization and non-formalization. Findings The following findings are established. First, the positive (negative) effect of information sharing offices (ISO) on formal (informal) financial development is consistent with theory. Second, ISOs consistently increase formal financial development, with the incidence of PCRs higher in terms of magnitude, and financial sector formalization, with the impact of PCBs higher for the most part. Third, only PCBs significantly decrease informal financial development and both ISOs decrease financial sector informalization. Policy implications are discussed. Originality/value The study assesses the effect of reducing IA on financial development when existing levels of it matter because current studies based on mean values of financial development provide blanket policy implications which are unlikely to be effective unless they are contingent on prevailing levels of financial development and tailored differently across countries with high, intermediate and low initial levels of financial development.

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Financial Sector Development and Investment in Selected ECOWAS Countries: Empirical Evidence using Heterogeneous Panel Data Method

SSRN Electronic Journal ◽

10.2139/ssrn.3647547 ◽

2020 ◽

Author(s):

Chimere Iheonu ◽

Simplice Asongu ◽

Kingsley Odo ◽

Patrick Ojiem

Keyword(s):

Panel Data ◽

Empirical Evidence ◽

Financial Sector ◽

Financial Sector Development ◽

Heterogeneous Panel

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Financial sector development & firm growth in BRICS countries

Risk Governance and Control Financial Markets & Institutions ◽

10.22495/rgc7i4c1art4 ◽

2017 ◽

Vol 7 (4-1) ◽

pp. 126-134

Author(s):

Shame Mugova

Keyword(s):

Firm Growth ◽

Financial Sector ◽

Productive Capacity ◽

Growth Opportunities ◽

Listed Firms ◽

Speed Of Adjustment ◽

External Finance ◽

Financial Sector Development ◽

Brics Countries ◽

The Impact

The development of an economy’s financial sector facilitates improved access to capital. This study focuses on firm growth in terms of how much assets it controls and BRICS is chosen as the empirical medium of investigation. The impact financial sector development on firm growth amongst 3353 listed firms in BRICS countries is investigated using a GMM estimation technique. Firm’s investment in assets increases the organizational resources and productive capacity needed to achieve growth in the market. Financial sector development improves access to capital and firms with higher access to external finance pursue growth opportunities using debt. Financial sector development helps firms to adjust their capital structures quickly thereby minimizing the costs of staying off target. The speed of adjustment of firms towards their target capital structure facilitates financing of firm growth. The study found that listed firms in Brazil, Russia India, China and South Africa have a target total liabilities-to-total assets ratio and financial sector development helps firms to partially adjust towards target levels and pursue growth opportunities.

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The impact of financial sector reforms on foreign direct investment in an emerging economy: empirical evidence from Ghana

Journal of Humanities and Applied Social Sciences ◽

10.1108/jhass-11-2019-0077 ◽

2020 ◽

Vol 2 (4) ◽

pp. 271-284

Author(s):

Kofi Kamasa ◽

Isaac Mochiah ◽

Andrews Kingsley Doku ◽

Priscilla Forson

Keyword(s):

Foreign Direct Investment ◽

Empirical Evidence ◽

Direct Investment ◽

Least Squares Method ◽

Financial Sector ◽

Ordinary Least Squares ◽

Sector Reform ◽

Content Type ◽

Financial Sector Reform ◽

The Impact

Purpose This paper aims to empirically investigate the impact that financial sector reforms have on foreign direct investment (FDI) in Ghana. Design/methodology/approach Composite financial sector reform index was constructed, which was made up of various forms of reform policies that were implemented from 1987 to 2016. The auto regressive distributed lag bounds test was used to establish cointegration between variables. Having controlled for other covariates that affect FDI such as trade openness, exchange rate, gross domestic product per capita, inflation and by using the fully modified ordinary least squares method, the estimations are robust as it uses a semi-parametric correction to avoid for any possible issues of endogeneity and serial correlation. Findings Results from the paper reveal that financial sector reform deepening boost FDI with a 2.167% increase in FDI following from a unit percentage improvement of the financial sector reforms. Considering the various categories of reforms, the results reveal that competitive reforms have the highest impact on FDI followed by privatization reforms with positive and significant elasticity coefficients of 2.174% and 0.726%, respectively. Behavioral reforms revealed a positive effect on FDI, albeit insignificant. Originality/value The paper contributes to policy by providing empirical evidence on the effect of financial sector reform on FDI inflows in Ghana. As far as the review of literature is concerned, this paper provides the foremost empirical evidence on the subject with sole emphasis on Ghana. Thus, this paper suggests the deepening of the financial sector reforms, improving competition and maintaining macroeconomic stability.

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The Impact of Inflation on Financial Sector Development: Evidence from Nigeria

International Journal of Economics and Finance ◽

10.5539/ijef.v12n2p56 ◽

2020 ◽

Vol 12 (2) ◽

pp. 56

Author(s):

Afangideh U. J. ◽

Garbobiya T. S. ◽

Umar F. B. ◽

Usman N.

Keyword(s):

Financial Development ◽

Significant Relationship ◽

Financial Sector ◽

Threshold Effects ◽

Quarterly Data ◽

Financial Sector Development ◽

Long Run ◽

Short Run ◽

Auto Regressive ◽

The Impact

This paper examines the Impact of inflation on financial sector development in Nigeria using quarterly data from 2002-2017. Financial sector development is proxied using money supply as a share of GDP (M2/GDP).The Auto-Regressive Distributive lag (ARDL) model is employed to carry out the estimation given the weakness of the Engle-Granger residual-based cointegration technique to test the long-run and short-run effects of the impacts of inflation on financial sector development. The results of the estimation reveal that there is a positive and statistically significant relationship between inflation and financial sector development in Nigeria. There is need to test for threshold effects of inflation on financial development in Nigeria.

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Institutional Quality and Financial Sector Development: Empirical Evidence from Nigeria

American Journal of Business and Management ◽

10.11634/216796061706919 ◽

2018 ◽

Vol 7 (1) ◽

pp. 1 ◽

Cited By ~ 1

Author(s):

Fisayo Fagbemi ◽

John Oluwasegun Ajibike

Keyword(s):

Empirical Evidence ◽

Financial Development ◽

Good Governance ◽

Developing Economies ◽

Institutional Quality ◽

Financial Sector ◽

African Countries ◽

Financial Sector Development ◽

Long Run ◽

Short Run

In view of the indispensable role of financial sector in both emerging and developing economies, there has been a notable spotlight on the financial sector development over the years in most African countries. Nonetheless, there are only a few studies on this topical issue, particularly for Nigeria. Hence, this study examines the long – run and short – run dynamic relationship between institutional quality and financial development in Nigeria over the period of 1984 – 2015 using Auto-Regressive Distributed Lag (ARDL) bounds test approach to cointegration. Using two different indicators (Private credit and M2) of financial development, the results consistently show that institutional factors do not have significant effect on financial development in the long – run as well as in the short – run. Furthermore, the empirical evidence indicates that regulatory quality and governance system (institutions) do not necessarily contribute to financial development in a feeble institutional environment, specifically in Nigeria. Thus, our findings suggest that whilst weak institutions could increase the risk of limiting the functioning of financial system, good governance and strong institutions are the essential ingredient of financial development in Nigeria. As a consequence, policies aimed at strengthening the quality of institutions and governance should form the major policy thrust of government (policy makers). These could help improving financial sector development in Nigeria.

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The convergence of financial sector in Asia

International Journal of Research in Business and Social Science (2147-4478) ◽

10.20525/ijrbs.v10i6.1319 ◽

2021 ◽

Vol 10 (6) ◽

pp. 166-173

Author(s):

Maria Pinita Angelia ◽

Rudi Purwono

Keyword(s):

Stock Market ◽

Empirical Evidence ◽

Financial Sector ◽

Estimation Technique ◽

Method Of Moment ◽

Macroeconomic Variables ◽

Financial Sector Development ◽

Development Indicator ◽

Private Credit ◽

Generalized Method Of Moment

This study aims to identify the convergence of financial sector development and the effect of macroeconomic variables on each financial sector development indicator in Asia. The sample used consists of 24 countries in Asia during the period 2010-2018. Identification of convergence using ?-convergence absolute and conditional. Indicators are used to represent the development of the financial sector namely private credit, liquid liabilities, stock market capitalization, and stock market turnover. Empirical evidence was based on the Generalized Method of Moment (GMM) estimation technique. The results showed that there was convergence in Asia and that macroeconomic variables had a significant effect on the development of the financial sector.

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