scholarly journals The Impact of Financial Sector Development on Economic Growth: Analysis of the Financial Development Gap between Cameroon and South Africa

2015 ◽  
Author(s):  
Piabuo Serge Mandiefe
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Financial Development ◽  
Growth Analysis ◽  
Financial Sector ◽  
Financial Sector Development ◽  
The Impact ◽  
Development Gap

Financial development, economic growth and millennium development goals in South Africa

2015 ◽  
Vol 42 (5) ◽  
pp. 459-479 ◽  
Author(s):  
Oludele Akinloye Akinboade ◽  
Emilie Chanceline Kinfack
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Financial Development ◽  
Millennium Development Goals ◽  
Financial Sector ◽  
Development Economic ◽  
Content Type ◽  
Financial Sector Development ◽  
Development Goals ◽  
The Relationship

Purpose – The purpose of this paper is to empirically report the findings on the relationship between financial sector development, economic growth and of millennium development goals (MDGs) for poverty reduction, education and health development in South Africa. Design/methodology/approach – The autoregressive distributed lag bounds testing technique was applied to two indicators of financial development, economic growth and four indicators of MDGs. Findings – Economic growth and MDGs jointly cause financial development. Similarly, economic growth and financial sector development jointly cause the attainment of MDGs. The attainment of MDGs such as increased per capita expenditure on food and education as well as economic growth jointly cause financial development. Practical implications – The findings highlight the complexity of the relationship between financial development, economic growth and MDGs. It is essential that the government of South Africa pursue a three track strategy of promoting financial sector development, economic growth and MDGs. The development of one strategy causes and is caused by the development of the other two. Originality/value – Relationships between financial development, economic growth and MDG targets are unsettled in the literature. This paper studies the link between the three variables in South Africa. Hence, the contribution of this study is to enrich the understanding of this important field in the context of an important African country.

The Role of Financial Sector Development in the Tourism- Growth Nexus: A Case of Southern African Countries

2018 ◽  
Vol 10 (3(J)) ◽  
pp. 100-110
Author(s):  
Kunofiwa Tsaurai
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Random Effects ◽  
Financial Management ◽  
Fixed Effects ◽  
Panel Data Analysis ◽  
Financial Sector ◽  
Empirical Literature ◽  
Financial Sector Development ◽  
The Impact

The study explored the impact of financial development on the tourism -growth nexus in Southern African (SADC) countries using the three panel data analysis approaches (pooled OLS, fixed and random effects). Specifically, the study investigated whether financial development is a channel through tourism influences economic growth in SADC countries or if the complementarity between financial development and tourism has a significant positive impact on economic growth in the SADC region? Theoretical and empirical literature review shows that the positive separate impact of tourism and financial development on economic growth is no longer a disputed matter. What has so far not been conclusively studied is whether financial management is a channel through which tourism influences economic growth. It is against this backdrop that the author undertook the current study in order to make a contribution to literature. The study found out that tourism had a significant negative influence on economic growth whereas financial development positively and significantly affected economic growth in the SADC region. The complementarity between tourism and financial development had a positive (fixed effects) and significant positive influence (pooled OLS and random effects) on economic growth in SADC countries, in line with theoretical predictions. SADC countries are therefore urged to improve their financial sector development levels in order to enhance the impact of tourism on economic growth. 

The Impact Of Financial Sector Development On Economic Growth In The Middle East And North Africa

2019 ◽  
pp. 81
Author(s):  
محمد سعيد محمود بللور ◽  
عامر عبدالفتاح زكريا باكير
Keyword(s):  
Economic Growth ◽  
Middle East ◽  
North Africa ◽  
Financial Sector ◽  
Financial Sector Development ◽  
The Impact

Financial sector development and income inequality in South Africa

2017 ◽  
Vol 8 (4) ◽  
pp. 420-432 ◽  
Author(s):  
Forget Mingiri Kapingura
Keyword(s):  
South Africa ◽  
Income Inequality ◽  
Financial Development ◽  
Empirical Studies ◽  
Financial Sector ◽  
Financial Inclusion ◽  
External Trade ◽  
Bounds Testing ◽  
Content Type ◽  
Financial Sector Development

Purpose The purpose of this paper is to examine the relationship between financial sector development and inequality in South Africa for the period from 1990 to 2012. Unlike previous studies, the study examines the role of both the broad measure of financial sector development (Bank credit to the private sector) and a measure of financial inclusion (ATMs). Design/methodology/approach Utilising quarterly data, the autoregressive distributed lag bounds testing model approach to cointegration test was estimated. The approach was preferred due to its compatibility with data of different orders and flexibility. Findings The findings indicate that financial development, especially when it is inclusive reduces the level of inequality in South Africa both in the short- and long-run. The results also highlighted that economic growth, external trade activities and government activities have played a very important role in reducing inequality in South Africa. On the other hand the empirical results also highlight that increasing inflation is regressive on inequality in South Africa. Research limitations/implications The results from the study imply that financial development on its own though important may not benefit the disadvantaged groups such as the poor and the rural community until it is inclusive. It is important to note that the study was carried out on the premise that inequality plays a very important role in exacerbating poverty levels in South Africa. Practical implications The paper highlights another avenue which authorities can pursue to reduce the level of inequality in the country. Social implications The paper documents the importance of financial inclusion in reducing the level of inequality in South Africa rather than advocating for financial sector development only. Originality/value The paper makes a contribution through analysing the effect of financial inclusion on income inequality rather than broad financial sector development which is common to the majority of the available empirical studies.

scholarly journals Information asymmetry and conditional financial sector development

2017 ◽  
Vol 9 (4) ◽  
pp. 372-392
Author(s):  
Simplice Asongu ◽  
Jacinta Nwachukwu
Keyword(s):  
Information Asymmetry ◽  
Financial Development ◽  
Financial Sector ◽  
Policy Implications ◽  
African Countries ◽  
Content Type ◽  
Mean Values ◽  
Financial Sector Development ◽  
Negative Effect ◽  
The Impact

Purpose The purpose of this study is to examine the role of reducing information asymmetry (IA) on conditional financial sector development in 53 African countries for the period 2004-2011. Design/methodology/approach The empirical evidence is based on contemporary and non-contemporary quantile regressions. Instruments for reducing IA include public credit registries (PCRs) and private credit bureaus (PCBs). Hitherto unexplored dimensions of financial sector development are used, namely, financial sector dynamics of formalization, informalization, semi-formalization and non-formalization. Findings The following findings are established. First, the positive (negative) effect of information sharing offices (ISO) on formal (informal) financial development is consistent with theory. Second, ISOs consistently increase formal financial development, with the incidence of PCRs higher in terms of magnitude, and financial sector formalization, with the impact of PCBs higher for the most part. Third, only PCBs significantly decrease informal financial development and both ISOs decrease financial sector informalization. Policy implications are discussed. Originality/value The study assesses the effect of reducing IA on financial development when existing levels of it matter because current studies based on mean values of financial development provide blanket policy implications which are unlikely to be effective unless they are contingent on prevailing levels of financial development and tailored differently across countries with high, intermediate and low initial levels of financial development.

scholarly journals Causal Relationship Between Financial Sector Development in SMEs & Economic Growth in Southern Africa Region

2021 ◽  
Vol 18 ◽  
pp. 996-1018
Author(s):  
Abigail Chivandi ◽  
Happiness Makumbe ◽  
Olorunjuwon Samuel
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Financial Development ◽  
Financial Sector ◽  
Causal Connection ◽  
Financial Sector Development ◽  
Bidirectional Relationship ◽  
Causality Tests ◽  
Annual Time Series ◽  
Development Support

This study explores causal relationship between financial sector development in SMEs and economic growth in Zimbabwe using annual time series and the Error Correction Model (ECM) framework. Monetary sector improvement and financial development stayed a controversial issue in Southern African nations. Market analysts have distinctive hypothetical and exact perspectives on the causal connection between monetary sector improvement and financial development. support supply driving speculation that monetary sector improvement prompts financial development & credit to request pulling speculation which proposes that monetary improvement results from financial development. Study made use of Unit Root Tests, Cointegration, ECM and Granger Causality Tests. Empirical findings revealed a bidirectional relationship between financial sector development in SMEs, economic & business growth. Business & Economic Growth enhance a strong and flexible legal system allowing banks to allocate resources (credit) more efficiently to SMEs. Credit should be accessed by all enterprise fairly to encourage the development of indigenous businesses through SMEs.

scholarly journals Interest Rate Deregulation, Bank Development And Economic Growth In South Africa: An Empirical Investigation

2010 ◽  
Vol 9 (11) ◽  
Author(s):  
Nicholas M Odhiambo
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Interest Rate ◽  
Causal Relationship ◽  
Financial Development ◽  
Positive Impact ◽  
Strong Support ◽  
Prima Facie ◽  
Financial Depth ◽  
The Impact

In this paper the dynamic relationship between interest rate reforms, bank-based financial development and economic growth is examined – using two models in a stepwise fashion. In the first model, the impact of interest rate reforms on financial development is examined using a financial deepening model. In the second model, the dynamic causal relationship between financial development and economic growth is examined, by including investment as an intermittent variable in the bi-variate setting, thereby creating a simple tri-variate causality model. Using cointegration and error-correction models, the study finds strong support for the positive impact of interest rate reforms on financial development in South Africa. However, contrary to the results from some previous studies, the study finds that financial development, which results from interest rate reforms, does not Granger cause investment and economic growth. In addition, the study finds a uni-directional causal flow from investment to financial development and prima-facie causal flow from investment to growth. The study, therefore, concludes that although interest rate reforms impact positively on financial depth in South Africa, the causal relationship between financial depth and economic growth tends to take a demand-following path. Moreover, given the causal flow from investment to financial development and a prima facie causal flow from investment to growth, it is likely that the economic development in South Africa is driven largely by the growth of the real sector rather than the financial sector.

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