Nexus between economic growth, financial development, and energy consumption in Sub‐Saharan African countries: A dynamic approach

2021 ◽  
Author(s):  
Abdoulganiour Almame Tinta ◽  
Salifou Ouedraogo ◽  
Noel Thiombiano
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Financial Development ◽  
Dynamic Approach ◽  
African Countries ◽  
Sub Saharan

scholarly journals The Finance Growth Link: Comparative Analysis Of Two Eastern African Countries

2016 ◽  
Vol 19 (3) ◽  
pp. 147-167 ◽  
Author(s):  
Ashenafi Beyene Fanta ◽  
Daniel Makina
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Financial Development ◽  
Low Income ◽  
Structural Breaks ◽  
Response Analysis ◽  
African Countries ◽  
Vector Autoregressive ◽  
Stock Market Development ◽  
Sub Saharan

This paper examines the finance growth link of two low-income Sub-Saharan African economies – Ethiopia and Kenya – which have different financial systems but are located in the same region. Unlike previous studies, we account for the role of non-bank financial intermediaries and formally model the effect of structural breaks caused by policy and market-induced economic events. We used the Vector Autoregressive model (VAR), conducted impulse response analysis and examined variance decomposition. We find that neither the level of financial intermediary development nor the level of stock market development explains economic growth in Kenya. For Ethiopia, which has no stock market, intermediary development is found to be driven by economic growth. Three important inferences can be made from these findings. First, the often reported positive link between finance and growth might be caused by the aggregation of countries at different stages of economic growth and financial development. Second, country-specific economic situations  and episodes are important in studying the relationship between financial development and economic growth. Third, there is the possibility that the econometric model employed to test the finance growth link plays a role in the empirical result, as we note that prior studies did not introduce control variables.

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.

scholarly journals Can financial development influence economic growth: The sub-Saharan analysis?

2019 ◽  
Vol 12 (1) ◽  
Author(s):  
Thobeka Ncanywa ◽  
Karabo Mabusela
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Financial Stability ◽  
Financial Sector ◽  
Financial Economic ◽  
Positive Influence ◽  
African Countries ◽  
Macroeconomic Policies ◽  
Long Run ◽  
Sub Saharan

Orientation: Financial sector development in a vast majority of sub-Saharan African countries has the potential to reduce the volatility of growth.Research purpose: This article is aimed at determining the influence of financial development on economic growth in selected sub-Saharan African countries.Motivation for the study: In most of the sub-Saharan countries, financial sectors are among the world’s least developed, and the absence of deep, efficient financial markets puts major constraints on economic growth.Research approach/design and method: This article employed panel autoregressive and distributive lag model to determine the relationship between financial development and economic growth.Main findings: The results indicated that there exists a short- and a long-run relationship between financial development and economic growth in the selected countries. In the long run, bank credit to the private sector and liquid liabilities have a positive influence on economic growth, with gross domestic savings exhibiting a negative influence.Practical/managerial implications: This article makes recommendations that as financial stability, both globally and within countries, generates jobs and improves productivity, more effort should be made in ensuring an effective and sound developed financial sector system.Contribution/value-add: The financial-economic growth nexus indicate that a well-functioning financial market development can promote economic growth. However, some controversies exist as some evidence indicated that a negative or positive financial development–growth nexus exists, so there was a need to find out what is the sub-Saharan case. Furthermore, there was a need to find development regulatory and macroeconomic policies that enhance growth.

scholarly journals What is the role of Financial Development and Energy Consumption on Economic Growth?

2014 ◽  
Vol 3 (1) ◽  
pp. 137-149
Author(s):  
Doaa Mohamed Salman ◽  
Eyad Atya
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Financial Development ◽  
North African ◽  
African Countries ◽  
Policy Makers ◽  
Applied Model ◽  
North African Countries ◽  
Relationship Of

This paper aims to test the validity of the causality between financial development and economic growth on energy consumption in three of North African countries. The study employs error coreection model and Granger causaility test to analyza a dataset for three North African countries covering a period from 1980 to 2010. The applied model is based on demand function for energy to assess the existing of causal relationship of energy with financial development, and economic growth, in Algeria, Egypt, and Tunisia. Empirical results provide a positive significant relating financial development and energy consumption in Algeria, and Tunisia. On the other hand, Egypt’s results show a negative significant relationship relating energy consumption and financial development. The paper is valuable to policy makers in North African countries in their pursuit for achieving economic growth as it clarifies the urge for the financial development reforms to stimulate investment and growth.

scholarly journals What is the role of Financial Development and Energy Consumption on Economic Growth? New Evidence from North African Countries

2016 ◽  
Vol 3 (1) ◽  
pp. 137
Author(s):  
Doaa Mohamed Salman ◽  
Eyad M. Atya
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Financial Development ◽  
North African ◽  
African Countries ◽  
Policy Makers ◽  
Applied Model ◽  
North African Countries ◽  
Relationship Of ◽  
New Evidence

<p>This paper aims to test the validity of the causality between financial development and economic growth on energy consumption in three of North African countries. The study employs error coreection model and Granger causaility test to analyza a dataset for three North African countries covering a period from 1980 to 2010. The applied model is based on demand function for energy to assess the existing of causal relationship of energy with financial development, and economic growth, in Algeria, Egypt, and Tunisia. Empirical results provide a positive significant relating financial development and energy consumption in Algeria, and Tunisia. On the other hand, Egypt’s results show a negative significant relationship relating energy consumption and financial development. The paper is valuable to policy makers in North African countries in their pursuit for achieving economic growth as it clarifies the urge for the financial development reforms to stimulate investment and growth.</p>

scholarly journals The Long-Run Effects of Trade Openness on Carbon Emissions in Sub-Saharan African Countries

Energies ◽  
2020 ◽  
Vol 13 (20) ◽  
pp. 5295
Author(s):  
Huaping Sun ◽  
Love Enna ◽  
Augustine Monney ◽  
Dang Khoa Tran ◽  
Ehsan Rasoulinezhad ◽  
...  
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Carbon Emissions ◽  
Negative Impact ◽  
Trade Openness ◽  
Sustainable Growth ◽  
African Countries ◽  
Long Run ◽  
Study Results ◽  
Sub Saharan

Using a panel cointegration model developed based on the data extracted from the World Bank indicators, this study quantified the relationship between carbon emissions, energy consumption, economic growth, and trade openness in sub-Saharan African countries. It discovered from our analysis that there exists a long-run causality association amongst CO2 emissions, energy consumption, economic growth, and trade openness. The study noted the existence of the Environmental Kuznets Curve (EKC) in the panel using the square term for trade openness; it was found to have a negative impact, thus trade in the long run will somewhat decrease the environmental pollution in this region. The study results imply that there should be stringent policies and rigorous enforcement in sub-Saharan African to ensure sustainable growth without associative environmental issues.

scholarly journals Finance-growth nexus in sub-Saharan Africa

2021 ◽  
Vol 24 (1) ◽  
Author(s):  
Celsa M.D.C. Machado ◽  
António F.M.G. Saraiva ◽  
Paulo D.D. Vieira
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Low Income ◽  
Developed Countries ◽  
Dynamic Panel Data ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
Empirical Literature ◽  
African Countries ◽  
Sub Saharan

Background: There is now significant empirical literature suggesting that finance is good for growth only up to a threshold level of financial development, becoming harmful after that level, in developed and developing countries.Aim: This study extends this literature that investigates non-linearities on the finance-growth link, by testing the inverted U-shape hypothesis in sub-Saharan African countries, which are among the least developed ones.Setting: 36 countries from sub-Saharan Africa over the period 1980–2015.Method: Estimation of quadratic dynamic panel data models by system-generalised method of moments.Results: Empirical results show that there is a hump-shaped relationship between financial development and economic growth in sub-Saharan African countries.Conclusion: Results suggest that the hypothesis of ‘too much finance harms economic growth’ also holds for low-income and less developed countries, but for much lower threshold levels of financial development than those of more developed and higher-income countries. As for policy implications, measures to strengthen finance quality and other growth-enhancing strategies need to be undertaken, rather than increasing finance size.

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