Banking Sector Competition and Financial Development in Sub-Saharan Africa

Ricky-Okine, Charles K.; Amankwaa, Twum; Anane, Emmanuel

doi:10.47127/ijtmr.v5i3.104

Cited by 4 publications

(3 citation statements)

References 87 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Although, our results showed a positive effect but practically some domestic banks in Africa are kicked out of the market since they do not have the means to compete with the larger and foreign banks. The positive result is akin to Ricky‐Okine et al (2020) who showed that competition enhances the financial development in SSA. Our finding is inconsistent with that of Carbó et al (2009), who concluded that banking competition could have a negative effect on credit allocation for small firms with information issues.…”

Section: Discussion Of Resultsmentioning

confidence: 83%

The effects of foreign bank presence on financial development in Africa: The role of institutional quality

Iddrisu¹,

Abor

Banyen³

2023

Rev Financ Econ

View full text Add to dashboard Cite

Despite the momentous rise in concentration and market share of foreign banks in overall bank assets in Africa, rigorous empirical work(s) examining their effect on financial sector development in Africa is hard to find. In view of this, the study seeks to investigate the moderating role of institutions/governance on the foreign bank presence‐financial development nexus. Employing the two‐step system generalized method of moment for a panel dataset of 28 economies in Africa over the period, 2000–2018, the results show that foreign bank presence has a positive effect on financial development. Also, the study finds evidence that foreign banks in host countries increase financial development in the presence of quality institutions. The study recommends improvement in institutional quality, which will help foreign banks to promote financial development.

show abstract

Section: Discussion Of Resultsmentioning

confidence: 83%

The effects of foreign bank presence on financial development in Africa: The role of institutional quality

Iddrisu¹,

Abor

Banyen³

2023

Rev Financ Econ

View full text Add to dashboard Cite

show abstract

“…However, the role of manufacturing and productivity as a source of financial development has been questioned. Ricky-Okine et al (2020) show that recent episodes of financial development acceleration in industrialized countries were driven by productivity advances in the services sector, rather than manufacturing. Nevertheless, the researchers argue that there is no direct link between these findings and financial development.…”

Section: Resultsmentioning

confidence: 96%

The Linkage Between Fiscal Policy and Financial Development: Exploring the Moderating Role of Institutional Quality in Emerging Economies

Okine,

Appiah,

Tetteh

2023

OMEE

View full text Add to dashboard Cite

This paper investigates the role of fiscal policy on financial development in Sub-Saharan African economies, drawing on a sample of 23 countries from 2000 to 2021 using the panel ARDL method after evidencing stationarity and co-integration properties among the variables. Our results show that an increase in fiscal policy and institutional quality decreases financial development in the long run. An increase in taxation and expenditure by the government affects the development of finance in SSA countries. Our results also show that an increase in foreign capital and industrial growth increases financial development in the long term. The outcome evidence that the interaction between fiscal policy and institutional quality exhibits a positive effect on financial development. Causality results reveal no directional link between fiscal policy, foreign capital, industrialization, and financial development with institutional quality indicating a single direction. The study suggested that SSA countries should focus on developing policies to track the implementation of adequate fiscal policy systems and structures. Institutional coherence within and between SSA nations is required for efficient fiscal policy development.

show abstract

“…Ricky-Okine and Amankwaa (2020) investigated how financial development affects economic growth in Ghana from 1960 to 2016 using the ARDL model. They found a long-term correlation between financial development and economic growth, with causation flowing from financial development to economic progress.…”

Section: Review Of Related Literaturementioning

confidence: 99%

Role of financial openness in Ghana’s financial sector development episode

Eduboah

2024

JFEP

View full text Add to dashboard Cite

Purpose This paper aims to reexamine the relationship between financial openness and financial development in Ghana. Design/methodology/approach The study applied maximum likelihood estimation and autoregressive distributed lag approach and tested Granger causality using quarterly data from 1990:1 to 2020:4. Findings This study revealed a long-run equilibrium relationship between financial openness and development, indicating that financial openness is a critical factor in Ghana’s financial development. Therefore, the study recommends with caution that policies aimed at promoting financial openness could be an effective way to encourage sustainable financial development in Ghana, as financial openness alone may not bring the desired outcome. Research limitations/implications The study contributes to the existing body of knowledge by providing empirical evidence of the link between financial openness and financial sector development in Ghana. Future research could delve deeper into the mechanisms through which financial openness affects financial development, exploring potential channels and transmission mechanisms. Practical implications The findings suggest that policymakers, particularly the Ministry of Finance and the Bank of Ghana, should prioritize policies aimed at promoting financial openness. This includes continued efforts toward financial liberalization and creating an environment conducive to domestic and international financial transactions. Moreover, policies aimed at increasing trade openness, boosting real GDP and maintaining moderate real interest rates are essential for fostering financial sector development. Social implications Enhancing financial sector development can have significant implications for society, including increased access to financial services, improved economic opportunities and enhanced overall economic stability. By promoting financial openness and development, policymakers would contribute to poverty reduction, job creation and overall socio-economic development. The study bridges the gap between theory and practice by providing empirical evidence supporting the theoretical proposition that financial openness stimulates financial sector development. Originality/value This study fills a crucial gap in the literature on the effects of financial openness on Ghana’s financial sector development. It focuses on Ghana, which liberalized its financial sector in 1988 as part of the overall economic reforms in 1983, and this justifies the starting point of this paper in 1990, as there are no adequate data before 1990. The study uses principal component analysis to construct an index that measures financial development. The study considers the recent financial crises in Ghana in 2017 and underscores the importance of understanding the link between financial openness and financial development, which becomes useful for policymakers and researchers studying financial system development in sub-Saharan Africa which includes Ghana.

show abstract

Banking Sector Competition and Financial Development in Sub-Saharan Africa

Cited by 4 publications

References 87 publications

The effects of foreign bank presence on financial development in Africa: The role of institutional quality

The effects of foreign bank presence on financial development in Africa: The role of institutional quality

The Linkage Between Fiscal Policy and Financial Development: Exploring the Moderating Role of Institutional Quality in Emerging Economies

Role of financial openness in Ghana’s financial sector development episode

Contact Info

Product

Resources

About