Drivers of financial stability gap: evidence from sub-Saharan Africa

IF 1.3 Q3 ECONOMICS

Journal of Financial Economic Policy Pub Date : 2023-10-24 DOI:10.1108/jfep-07-2023-0184

Evans Kulu, Bismark Osei

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Abstract

Purpose As an effort to support the quest for a stable financial sector, this study aims to determine the factors that contribute to the financial stability gap in sub-Saharan Africa (SSA). Design/methodology/approach The estimation techniques used include the fixed and random effect, system general methods of moments and dominance analysis. The data used is annual data for 33 SSA countries, covering the period 2007 to 2018. Findings Key findings from the analyses indicate that nonperforming loans increase gaps in financial stability while regulatory quality, control of corruption, political stability and appreciation of the local currency reduce the financial stability gap in SSA. Research limitations/implications The absence of a specific metric for measuring the financial stability gap appears to be the limitation of this study. Its existence could improve the discussion and also make replicability easier. However, this study relies on a measure introduced by Kulu et al. (2022b), which is also acceptable and quite popular in the literature. Originality/value To the best of the authors’ knowledge, this study is the first in the finance literature to estimate the determinants of the financial stability gap in SSA.

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金融稳定差距的驱动因素:来自撒哈拉以南非洲的证据

为了支持对稳定金融部门的追求，本研究旨在确定导致撒哈拉以南非洲(SSA)金融稳定差距的因素。使用的估计技术包括固定效应和随机效应、系统一般矩法和优势分析。使用的数据是33个SSA国家的年度数据，涵盖2007年至2018年。分析的主要发现表明，不良贷款扩大了金融稳定差距，而监管质量、腐败控制、政治稳定和本币升值则缩小了SSA的金融稳定差距。研究的局限性/启示缺乏衡量金融稳定差距的具体指标似乎是本研究的局限性。它的存在可以改善讨论，也使可复制性更容易。然而，本研究依赖于Kulu等人(2022b)引入的一种测量方法，该方法在文献中也是可以接受且相当流行的。据作者所知，本研究是金融文献中第一个估计SSA中金融稳定差距的决定因素的研究。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Financial Economic Policy ECONOMICS-

CiteScore

2.80

自引率

8.30%

发文量

期刊介绍： The Journal of Financial Economic Policy publishes high quality peer reviewed research on financial economic policy issues. The journal is devoted to the advancement of the understanding of the entire spectrum of financial policy and control issues and their interactions to economic phenomena. Economic and financial phenomena involve complex trade-offs and linkages between various types of risk factors and variables of interest to policy makers and market participants alike. Market participants such as economic policy makers, regulators, banking and competition supervisors, corporations and financial institutions, require timely and robust answers to the contemporary and emerging policy questions. In turn, such answers require thorough input by the academics, policy makers and practitioners alike. The Journal of Financial Economic Policy provides the forum to satisfy this need. The journal publishes and invites concise papers to enable a prompt response to current and emerging policy affairs.