scholarly journals Determinants Of Savings In The SADC Region: The Role Of Foreign Capital And Financial Development

2015 ◽  
Vol 31 (6) ◽  
pp. 2107 ◽  
Author(s):  
Forget Mingiri Kapingura ◽  
Sylvanus Ikhide ◽  
Asrat Tsegaye
Keyword(s):  
Financial Development ◽  
Foreign Capital ◽  
Panel Cointegration ◽  
Financial Sector ◽  
Ordinary Least Squares ◽  
Financial Deepening ◽  
Financial Flows ◽  
Financial Sector Development ◽  
Long Run ◽  
Domestic Savings

The study examines the determinants of savings in the SADC region, mainly focusing on the roles played by external financial flows and financial development in mobilising domestic savings utilising panel cointegration method and the Dynamic ordinary Least Squares (DOLS) approach from 1980 to 2009. Following the review of literature, the empirical model adopted established that there is a long-run relationship between the variables of interest. The results indicate that income, proxied with GDP, financial sector development and foreign capital have a positive relationship with savings. The results also suggest that financial sector development has played a very important role in influencing savings in the region. However on the other hand the results indicate that interest rate and dependency ratio have influenced savings negatively. The empirical results support the hypothesis that foreign savings bridges the gap between domestic demand and supply of finance in the SADC countries. There is need to attract more foreign capital given that it compliments domestic savings. At the same time policies aimed at financial deepening should still be pursued to further deepen the financial system in the SADC countries to further enhance savings. 

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

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.

scholarly journals Institutional Quality and Financial Sector Development: Empirical Evidence from Nigeria

2018 ◽  
Vol 7 (1) ◽  
pp. 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.

scholarly journals Inflation and Financial Sector Performance: The Case of Nigeria

2014 ◽  
Vol 7 (1) ◽  
pp. 55-69 ◽  
Author(s):  
R. Santos Alimi
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Financial Sector ◽  
Macroeconomic Performance ◽  
Financial Sector Development ◽  
Long Run ◽  
Negative Effect ◽  
Short Run ◽  
Sector Performance ◽  
Definition Of

Abstract The paper examines the long run and short run relationships between inflation and the financial sector development in Nigeria over the period between 1970 and 2012. Three variables, namely; broad definition of money as ratio of GDP, quasi money as share of GDP and credit to private sector as share of GDP, were used to proxy financial sector development. Our findings suggest that inflation presented deleterious effects on financial development over the study period. The main implication of the results is that poor macroeconomic performance has deleterious effects to financial development - a variable that is important for affecting economic growth and income inequality. Moreover, we observed a negative effect of the measures of financial development on growth, suggesting that impact of inflation on the economic growth passes through financial sector. Therefore, low and stable prices, is a necessary first step to achieving a deeper and more active financial sector that will enhance growth as predicted by Schumpeter.

scholarly journals Financial Development and CO2 Emissions in Post-Transition European Union Countries

2020 ◽  
Vol 12 (7) ◽  
pp. 2640 ◽  
Author(s):  
Yilmaz Bayar ◽  
Laura Diaconu (Maxim) ◽  
Andrei Maxim
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Co2 Emissions ◽  
Financial Development ◽  
Carbon Dioxide Emissions ◽  
Panel Cointegration ◽  
Financial Sector ◽  
Primary Energy ◽  
Primary Energy Consumption ◽  
Financial Sector Development

Carbon dioxide emissions are on the rise, posing a serious global issue. Therefore, it is important that policymakers identify the exact causes of these emissions. This paper investigates the influence of financial development, primary energy consumption, and economic growth on CO2 emissions in 11 post-transition European economies. The assessment was made for the 1995–2017 period using panel cointegration and causality analyses. The causality analyses did not reveal significant connection between financial sector development and CO2 emissions, but rather a two-way causality between primary energy consumption and economic growth, on one hand, and CO2 emissions on the other. Meanwhile, long-run analysis disclosed that financial sector development and primary energy consumption positively affected CO2 emissions. Our results seek to grab the attention of policy makers, who could work towards creating country-specific strategies that balance the relationship between financial development and CO2 emissions. These long-term policies could ensure both development of the financial sector and environmental protection.

Financial development and poverty reduction in India: an empirical investigation

2016 ◽  
Vol 43 (2) ◽  
pp. 106-122 ◽  
Author(s):  
Madhu Sehrawat ◽  
A K Giri
Keyword(s):  
Financial Development ◽  
Poverty Reduction ◽  
Financial Sector ◽  
Annual Data ◽  
Causality Test ◽  
Content Type ◽  
Financial Sector Development ◽  
Long Run ◽  
Integration Test ◽  
Short Run

Purpose – The purpose of this paper is to examine the relationship between financial sector development and poverty reduction in India using annual data from 1970 to 2012. The paper attempts to answer the critical question: does financial sector development lead to poverty reduction? Design/methodology/approach – Stationarity properties of the series are checked by using Ng-Perron unit root test. The paper uses the Auto Regressive Distributed Lag (ARDL) bound testing approach to co-integration to examine the existence of long-run relationship; error-correction mechanism for the short-run dynamics and Granger non-causality test to test the direction of causality. Findings – The co-integration test confirms a long-run relationship between financial development and poverty reduction for India. The ARDL test results suggest that financial development and economic growth reduces poverty in both long run and short run. The causality test confirms that there is a positive and unidirectional causality running from financial development to poverty reduction. Research limitations/implications – This study implies that poverty in India can be reduced by financial inclusion and financial accessibility to the poor. For a fast growing economy with respect to financial sector development this may have far-reaching implication toward inclusive growth. Originality/value – This paper is the first of its kind to empirically examine the causal relationship between financial sector development and poverty reduction in India using modern econometric techniques.

Role of Financial Sector in the Remittances-Growth Nexus in Fiji

2016 ◽  
Vol 1 (1) ◽  
pp. 17-36 ◽  
Author(s):  
Hong Chen ◽  
Tiru Jayaraman
Keyword(s):  
Foreign Aid ◽  
Direct Investment ◽  
Financial Sector ◽  
The Other ◽  
Pacific Island ◽  
Financial Sector Development ◽  
Long Run ◽  
Poor Families ◽  
Domestic Savings

Amongst the three kinds of non-debt creating capital transfers, welcomed by capital-short Pacific island countries (PICs) for supplementing their limited domestic savings, remittances presently top the list, the other two being foreign aid and foreign direct investment. Remittances help poor families, reducing poverty. In the long run, however, the contribution of remittances to growth in output and economic development is contingent upon financial sector development (FSD). PICs are now fostering financial sector development by promoting greater financial inclusion. This paper seeks to assess the role of FSD in the nexus between remittances and output by undertaking an empirical study of Fiji.

scholarly journals The Impact Of Inflation On Financial Sector Development: Experience From Zambia

2012 ◽  
Vol 28 (6) ◽  
pp. 1497 ◽  
Author(s):  
Nicholas M. Odhiambo
Keyword(s):  
Financial Development ◽  
Government Expenditure ◽  
Negative Relationship ◽  
Financial Sector ◽  
Bounds Testing ◽  
Financial Sector Development ◽  
Long Run ◽  
Negative Effect ◽  
Short Run ◽  
The Impact

This study examines the impact of inflation on financial development in Zambia during the period between 1980 and 2011. The study attempts to answer two critical questions: 1) Is there a long-run relationship between inflation and financial sector development in Zambia? 2) Does inflation in Zambia have any negative effect on financial sector development? The study uses the recently developed ARDL-bounds testing approach to examine this linkage. In order to address the problem of omission of variable bias, the study incorporates other variables, such as government expenditure, trade volume and GDP per capita in the financial development model, alongside inflation thereby, creating a simple multivariate model. Using the domestic credit to the private sector as a proxy for financial development, the study finds that there is a long-run relationship between inflation and financial development in Zambia. The study also finds that there is a distinctively negative relationship between inflation and financial development. The results apply, irrespective of whether the model is estimated in the short run or in the long run.

scholarly journals Panel Econometric Analysis on Mobile Payment Transactions and Traditional Banks Effort toward Financial Accessibility in Sub-Sahara Africa

2020 ◽  
Vol 12 (3) ◽  
pp. 895 ◽  
Author(s):  
Cephas Paa Kwasi Coffie ◽  
Hongjiang Zhao ◽  
Isaac Adjei Mensah
Keyword(s):  
Time Series Data ◽  
Unit Root Test ◽  
Panel Cointegration ◽  
Ordinary Least Squares ◽  
Sustainable Growth ◽  
Series Data ◽  
Mobile Payment ◽  
Cross Sectional ◽  
Mobile Payments ◽  
Long Run

The financial landscape of sub-Sahara Africa is undergoing major changes due to the advent of FinTech, which has seen mobile payments boom in the region. This paper examines the salient role of mobile payments in traditional banks’ drive toward financial accessibility in sub-Sahara Africa by using panel econometric approaches that consider the issues of independencies among cross-sectional residuals. Using data from the World Development Index (WDI) 2011–2017 on 11 countries in the region, empirical results from cross-sectional dependence (CD) tests, panel unit root test, panel cointegration test, and the fully modified ordinary least squares (FMOLS) approach indicates that (i) the panel time series data are cross-sectionally independent, (ii) the variables have the same order of integration and are cointegrated, and (iii) growth in mobile payment transactions had a significant positive relationship with formal account ownership, the number of ATMs, and number of new bank branches in the long-run. The paper therefore confirms that the institutional structure of traditional banks that makes them competitive, irrespective of emerging disruptive technologies, has stimulated overall financial accessibility in the region leading to overall sustainable growth in the financial sector. We conclude the paper with feasible policy suggestions.

Foreign capital inflows and economic growth: the experience of low-income countries in Sub Saharan Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Atif Awad
Keyword(s):  
Low Income ◽  
Foreign Capital ◽  
Ordinary Least Squares ◽  
Capital Inflows ◽  
Sub Saharan Africa ◽  
Low Income Countries ◽  
Content Type ◽  
Long Run ◽  
Foreign Capital Inflows ◽  
The Impact

Purpose This paper aims to investigate the long-run impact of selected foreign capital inflows, including aid, remittances, foreign direct investment (FDI), trade and debt, on the economic growth of 21 low-income countries in the Sub Saharan Africa (SSA) region, during the period 1990–2018. Design/methodology/approach To obtain this objective and for robust analysis, a parametric approach, which was dynamic ordinary least squares, and a non-parametric technique, which was fully modified ordinary least squares, were used. Findings The results of both models confirmed that, in the long run, trade and aid affected the growth rate of the per capita income in these countries in a positive way. However, external debt seemed to have an adverse influence on such growth. Originality/value First, this is the initial study that has addressed this matter across a homogenous group of countries in the SSA region. Second, while most of the previous studies regarding capital inflows into the SSA region have focused on the impact of only one or two aspects of such foreign capital inflows on growth, the present study, instead, examined the impact of five types of foreign capital inflows (aid, remittances, FDI, trade and debt).

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