Financial Development, Growth Volatility and Information Asymmetry in Sub-Saharan Africa: Does Law Matter?

2017 ◽  
Vol 85 (4) ◽  
pp. 570-588 ◽  
Author(s):  
Muazu Ibrahim ◽  
Paul Alagidede
Keyword(s):  
Information Asymmetry ◽  
Financial Development ◽  
Sub Saharan Africa ◽  
Sub Saharan ◽  
Growth Volatility

scholarly journals Information asymmetry and financial dollarization in sub-Saharan Africa

2018 ◽  
Vol 9 (2) ◽  
pp. 231-249 ◽  
Author(s):  
Simplice Asongu ◽  
Ibrahim Raheem ◽  
Venessa Tchamyou
Keyword(s):  
Information Asymmetry ◽  
Information Sharing ◽  
Financial Development ◽  
Ordinary Least Squares ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Sub Saharan ◽  
Generalised Method Of Moments ◽  
Development Outcomes ◽  
Financial Dollarization

Purpose Financial dollarisation in sub-Saharan Africa (SSA) is most persistent compared to other regions of the world. The purpose of this paper is to complement the existing scant literature on dollarisation in Africa by assessing the role of information sharing offices (public credit registries and private credit bureaus) on financial dollarisation in 25 SSA countries for the period 2001-2012. Design/methodology/approach The empirical evidence is based on ordinary least squares and generalised method of moments (GMM). Findings The findings show that information sharing offices (which are designed to reduce information asymmetry) in the banking industry are a deterrent to dollarisation. The underpinning assumption that financial development reduces financial dollarisation is confirmed. Originality/value There is scant literature on the relevance of information sharing offices in development outcomes in Africa. While the establishment of these offices in most countries in the continent began in 2004, scholarship on the importance of these offices in financial development is sparse.

scholarly journals Financing innovative development of the African economies: the role of digitalization and financial innovations

2020 ◽  
Vol 28 (3) ◽  
pp. 429-439
Author(s):  
Tijani Forgor Alhassan ◽  
Ahou Julie Kouadio ◽  
Dadson Etse Gomado
Keyword(s):  
Financial Development ◽  
Financial Services ◽  
Positive Relationship ◽  
Financial Innovation ◽  
Sub Saharan Africa ◽  
Innovative Development ◽  
Mobile Banking ◽  
Data Set ◽  
Financial Innovations ◽  
Sub Saharan

The article examines the relationship between financial innovation (mobile banking) variables in sub-Saharan Africa. Mobile banking (also known as mobile money) is one of the main financial innovations in the sub-Saharan region, and it is a system through which non-bank residents (residents without bank accounts, etc.) receive financial services. The overall importance of financial innovation in today’s digital and knowledge-based economy, and indeed, innovative development, inspired this study. Using a partial linear regression model, we analysed the International Monetary Fund data set, the World Bank’s national economic data, and mobile banking data from GSMA for the period from 2011 to 2017. A negative correlation was found between these variables and growth, as well as financial development, but a positive relationship was established between financial development and economic development. This positive relationship re-confirms the argument that financial development affects economic growth. It is recommended that policy makers develop and implement the necessary policy tools that can promote this form of financial innovation, and thus link its benefits to the national economy in general.

scholarly journals THE ROLE OF FINANCIAL DEVELOPMENT AND INSTITUTIONAL QUALITY ON ENVIRONMENTAL SUSTAINABILITY IN SUB-SAHARAN AFRICAN COUNTRIES

2018 ◽  
Vol 6 (9) ◽  
pp. 156-177
Author(s):  
Aliyu Alhaji Jibrilla
Keyword(s):  
Financial Development ◽  
Environmental Sustainability ◽  
Carbon Dioxide Emissions ◽  
Early Stage ◽  
Institutional Quality ◽  
Environmental Conservation ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Pooled Mean Group ◽  
Sub Saharan

This study addresses the question of financial development and institutional quality influence on the environmental sustainability of some 13 countries from the sub-Saharan Africa. Relying upon pooled mean group (PMG) for panel data, we provide evidence which suggest that both financial development and institutional quality are statistically significant determinants of per capita carbon dioxide emissions in the region. More specifically, we found that without healthy institutions and sound financial system sub-Saharan African countries might not avoid environmental degradation experienced by advanced nations during their early stage of economic progress. Our results also support the EKC hypothesis in the region.  In addition, the paper also shows that more openness to FDI inflows is good for the environment across the SSA. These findings suggest the need for institutional and financial service reform that supports robust environmental conservation.

scholarly journals The Nexus between Financial Development and Economic Growth: Panel Data Evidence from Developing Countries

2021 ◽  
Vol 14 (10) ◽  
pp. 489
Author(s):  
E. M. Ekanayake ◽  
Ranjini Thaver
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Panel Data ◽  
Least Squares ◽  
Financial Development ◽  
Panel Cointegration ◽  
Sub Saharan Africa ◽  
Explanatory Variables ◽  
Cointegration Tests ◽  
Sub Saharan

The objective of this study is to investigate the nexus between financial development (FD) in economic growth (GROWTH) in developing countries. The study uses panel data from 138 developing countries during the period 1980–2018. The relationship between financial development and economic growth is investigated using four explanatory variables that are commonly used to measure the level of financial development and several other control variables, including a dummy variable representing the financial and banking crises. The sample of 138 developing countries is also classified into six geographic regions. We have carried out panel unit-root tests and panel cointegration tests before estimating the specified models using both Panel Least Squares (Panel LS) and Panel Fully Modified Least Squares (FMOLS) methods. In addition, panel Granger causality tests have been conducted to identify the direction of causality between FD and GROWTH for each of the regions. The results of the study provide evidence of a direct relationship between FD and GROWTH in developing countries. Furthermore, there is evidence of bi-directional causality running from FD to GROWTH and from GROWTH to FD in samples of Europe and Central Asia, South Asia, and all countries, but not in East Asia and Pacific, Latin America and the Caribbean, Middle East and North Africa, and Sub-Saharan Africa.

Financial development and economic growth: Empirical evidence from Sub‐Saharan Africa

2020 ◽  
Author(s):  
Kong Yusheng ◽  
Jonas Bawuah ◽  
Agyeiwaa O. Nkwantabisa ◽  
Samuel O. O. Atuahene ◽  
George O. Djan
Keyword(s):  
Economic Growth ◽  
Empirical Evidence ◽  
Financial Development ◽  
Sub Saharan Africa ◽  
Sub Saharan

scholarly journals Financial Development and Energy Consumption in Sub-Saharan Africa: Evidence From Panel Vector Error Correction Model

SAGE Open ◽  
2020 ◽  
Vol 10 (3) ◽  
pp. 215824402093543
Author(s):  
Chigozie Nelson Nkalu ◽  
Samuel Chinwero Ugwu ◽  
Fredrick O. Asogwa ◽  
Mwuese Patricia Kuma ◽  
Queen O. Onyeke
Keyword(s):  
Energy Consumption ◽  
Error Correction ◽  
Granger Causality ◽  
Financial Development ◽  
Sub Saharan Africa ◽  
Vector Error Correction Model ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Sub Saharan

This study examines the nexus between financial development and energy consumption/use in Sub-Saharan Africa (SSA) using a panel vector error correction model (VECM), cointegration, and Granger causality tests over the period ranging from 1975 to 2017. The annual panel time-series data generated from the World Bank database were tested for unit-roots processing using both the Levin–Lin–Chu and Im–Pesaran–Shin before proceeding to Johanson cointegration technique, the results of which motivated the choice of adopting the panel VECM rather than panel vector autoregression in the methodology. From the estimation result especially on the variables of interest, there exists a positive and statistically significant relationship between financial development and energy consumption in the long run, but not statistically significant in the short run. Further findings from the panel Granger causality test shows a unidirectional causality running from financial development to energy consumption, gross domestic product per capita, population growth to urbanization with no feedback. Among a series of policy recommendations, the monetary authorities in Sub-Saharan African countries should ensure optimal utilization of financial instruments and technologies available in the system to enhance more robust financial development to boost efficiency in energy consumption in the region in line with the sustainable growth theory.

Savings-investment-financial development trilogy: evidence from SSA

2017 ◽  
Vol 9 (1) ◽  
pp. 20-33
Author(s):  
Ibrahim D. Raheem ◽  
Mutiu Abimbola Oyinlola
Keyword(s):  
Financial Development ◽  
Quantitative Measure ◽  
Financial Sector ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Qualitative Nature ◽  
Sub Saharan ◽  
Generalised Method Of Moments ◽  
Qualitative Measure

Purpose The study seeks to examine the role of financial development (FD) in the Feldstein–Horioka (FH) puzzle. The novelty of this study is based on the fact that the measures of FD are expanded to account for the qualitative nature of the financial sector (“better finance”). Design/methodology/approach The study used annual dataset for 37 countries in sub-Saharan Africa (SSA) for the period 1999 through 2010 and relied on the system generalised method of moments (GMM) technique, which takes accounts of endogeneity-related issues. Findings The estimated FH coefficients ranged between 0.419 and 0.720. The qualitative measures of FD have higher FH coefficient relative to the traditional or quantitative measure of FD (“more finance”). Hence, improvement in both the quantity and quality of the financial sector might be helpful in the mobilization, distribution and utilization of savings for investment purposes within these economies. The high FH coefficients obtained suggest that the FH puzzle does not hold in the SSA region. Practical implications Policymakers should formulate and design policies that would seek to ensure the development of the financial sector both in terms of quantity and quality. While taking this into consideration, special attention should be devoted to the qualitative measure of finance. Originality/value The study extends the work of Adeniyi and Egwaikhide (2013) by providing different and, possibly better proxies for FD to capture the efficiency and the qualitative nature of the financial system. This crux of the study serves as the value addition to the literature, as no other study the authors are aware of, has considered the importance of “better finance” indicators in the saving – investment nexus investigation.

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