Financial Development and Economic Growth in Sub-Saharan Africa: The Role of Institutions

IF 0.7 Q3 ECONOMICS

PSL Quarterly Review Pub Date : 2019-01-01 DOI:10.13133/2037-3643_72.291_5

W. Bandura, Canicio Dzingirai

{"title":"Financial Development and Economic Growth in Sub-Saharan Africa: The Role of Institutions","authors":"W. Bandura, Canicio Dzingirai","doi":"10.13133/2037-3643_72.291_5","DOIUrl":null,"url":null,"abstract":"The study aims to determine the relationship between financial development and economic growth with respect to the state of institutional quality on 27 Sub-Saharan Africa countries using a five-year averaged dataset over the period 1982-2016. The findings established evidence of a U-shaped relationship between financial development and growth which entails that more (less) finance drives (retards) growth in the region. The turning point beyond which financial development begins to contribute positively on economic growth ranges between 33% and 37%. Even though the connection is not strong, the selected institutional variables also showed both a direct and an indirect positive impact on economic growth. Financial development is positive and significant when embedded in selected well-developed institutions, which implies a complementary relationship of institutions and financial development on growth. It is therefore recommended that policy makers and responsible authorities take stringent measures to ensure the development of institutions and the financial sector for sustainable economic growth in the region. JEL codes: G20, O43","PeriodicalId":44488,"journal":{"name":"PSL Quarterly Review","volume":null,"pages":null},"PeriodicalIF":0.7000,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"16","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"PSL Quarterly Review","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.13133/2037-3643_72.291_5","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}

引用次数: 16

Abstract

The study aims to determine the relationship between financial development and economic growth with respect to the state of institutional quality on 27 Sub-Saharan Africa countries using a five-year averaged dataset over the period 1982-2016. The findings established evidence of a U-shaped relationship between financial development and growth which entails that more (less) finance drives (retards) growth in the region. The turning point beyond which financial development begins to contribute positively on economic growth ranges between 33% and 37%. Even though the connection is not strong, the selected institutional variables also showed both a direct and an indirect positive impact on economic growth. Financial development is positive and significant when embedded in selected well-developed institutions, which implies a complementary relationship of institutions and financial development on growth. It is therefore recommended that policy makers and responsible authorities take stringent measures to ensure the development of institutions and the financial sector for sustainable economic growth in the region. JEL codes: G20, O43

查看原文本刊更多论文

撒哈拉以南非洲的金融发展和经济增长:制度的作用

该研究旨在利用1982-2016年期间的五年平均数据集，确定27个撒哈拉以南非洲国家的金融发展与经济增长之间的关系。研究结果确立了金融发展与增长之间u型关系的证据，这意味着更多(更少)的金融推动(阻碍)该地区的增长。超过金融发展对经济增长的积极贡献的转折点在33%到37%之间。虽然联系不强，但所选制度变量对经济增长也表现出直接和间接的积极影响。在选定的发达机构中嵌入金融发展是积极和重要的，这意味着制度和金融发展对增长的互补关系。因此，建议决策者和主管当局采取严格措施，确保机构和金融部门的发展，以促进该区域的可持续经济增长。JEL代码:G20, O43

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

PSL Quarterly Review ECONOMICS-

CiteScore

1.30

自引率

14.30%

发文量

审稿时长

20 weeks