Financial Development and Income in African Countries

Baliamoune‐Lutz, Mina

doi:10.1111/j.1465-7287.2011.00281.x

Cited by 9 publications

(7 citation statements)

References 52 publications

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“…Finally, refs. [10,[47][48][49] found evidence of bidirectional causality and reverse causation. On the other hand, ref.…”

Section: Financial Development and Economic Growthmentioning

confidence: 99%

“…Several cross-country regression analyses support the tight link be-tween credit access and economic growth [5,6], and this has been shown in developed and developing economies [7,8]. Recent cross-countries studies also conclude on a reciprocal effect [9,10]. In short, while the empirical literature is conclusive on the linkages between financial development and economic growth, there is little evidence on the direction of causality.…”

Section: Introductionmentioning

confidence: 99%

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Using an Artificial Neural Networks Experiment to Assess the Links among Financial Development and Growth in Agriculture

2021

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Financial development, productivity, and growth are interconnected, but the direction of causality remains unclear. The relevance of these linkages is likely different for developing and developed economies, yet comparative cross-country studies are scant. The paper analyses the relationship among credit access, output and productivity in the agricultural sector for a large set of countries, over the period 2000–2012, using an Artificial Neural Networks approach. Empirical findings show that these three variables influence each other reciprocally, although marked differences exist among groups of countries. The role of credit access is more prominent for the OECD countries and less important for countries with a lower level of economic de-elopement. Our analysis allows us to highlight the specific effects of credit in stimulating the development of the agricultural sector: in developing countries, credit access significantly affects production, whereas in developed countries, it also has an impact on productivity.

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“…Finally, refs. [10,[47][48][49] found evidence of bidirectional causality and reverse causation. On the other hand, ref.…”

Section: Financial Development and Economic Growthmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Using an Artificial Neural Networks Experiment to Assess the Links among Financial Development and Growth in Agriculture

2021

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“…The findings showed that financial development has a negative effect on growth in long-run, according to Yucel (2009), the presence of structural breaks indicate a stable long-run with the negative link, according to Elijah & Hamza (2019) and, in the case of the short run, broad money supply have negative effects on economic growth (Sultana, 2018). Some studies have also found that there is bidirectional causality between financial development and economic growth (Lewis, 1995;Demetriades & Hussein, 1996;Baliamoune-Lutz, 2013;Murthy, et al, 2014;KAR, et al, 2014;Simionescu, et al, 2017). Trade openness has a positive significant impact on economic growth and the results also show that trade openness is the significant driving force for growth in the long run (Khan & Qayyum, 2007;Yucel, 2009;Shahbaz, 2012;Tsaurai, 2017;Obeid & Awad, 2018;Chandrashekar, et al, 2018;Nwadike, et al, 2020).…”

Section: Literature Reviewmentioning

confidence: 96%

The Relationship Between the Development of the Financial Sector and the Economic Growth in the Republic of North Macedonia

Saiti¹,

Trenovski²

2021

Proceedings of the International Conference "Economic and Business Trends Shaping the Future"

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According to economic theory, the money supply positively affects economic growth, especially in the short run. Additionally, for small and open economies, the openness of the economy plays a crucial role in economic growth. Therefore, the subject of this paper is the impact of the money supply, measured through the broad money aggregate (M3), and trade openness of the country on the economic growth in North Macedonia. M3 aggregate is taken as an indicator of the financial sector development, whereas on the other hand, the trade-to-GDP ratio is an indicator for the openness of the economy. The research is employing the Vector Autoregression (VAR) model, and quarterly data for the period 1995-2019 are used. As opposed to the economic theory, the results show the absence of a long-run relationship between GDP, broad money, and trade openness in North Macedonia for the observed period. Also, in the short run, M3 and trade openness have a significant positive impact on GDP. Additionally, there is no noticeable time gap in the above relationships. Namely, the impact of broad money and trade openness on GDP in North Macedonia is not much stronger after a significant time lag from the impact in the first year. This put into question the capability of the monetary policy as a tool of the broader macroeconomic policy to shift the aggregate demand curve upwards and boost economic activity.

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“…Other researchers hypothesise that economic growth causes financial development (Lucas, 1988;Stern, 1989). The empirical findings on the causal relationship between financial sector development and growth have been mixed (Baliamoune-Lutz, 2013;Ewetah and Okodua, 2013;Akinlo and Egbetunde, 2010;Dabos and Gantman, 2010).…”

Section: Theoretical Aspects and Literature Reviewmentioning

confidence: 99%

Does Financial Sector Development Enhance the Relationship between FDI and Economic Growth? A Comparative Study of East African Countries

Kelly

2016

J. Rev. Global Econ.

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This study examines the causal relationship between FDI and GDP growth in a number of East African countries, focusing on the impact of financial sector development on this relationship. There are strong theoretical reasons to believe that a developed financial sector will enhance the impact of FDI on growth, but empirical evidence remains scant. This study looks first at the short term causal relationship between FDI and GDP growth, using a robust methodology that avoids issues associated with Granger causality testing. This testing indicates little evidence of a relationship. Johansen cointegration testing yields little evidence of a long run relationship when a VECM containing just FDI and GDP growth is estimated, however once variables proxying financial sector development and an interaction variable between FDI and financial sector development are included, we find that although FDI and GDP growth may not be cointegrated directly, there is a relationship running through their interaction with the financial sector, and that FDI only appears to have a positive impact on GDP growth in cases where the financial sector is more developed. This finding is in line with the findings of previous researchers, and has important policy implications.

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Financial Development and Income in African Countries

Cited by 9 publications

References 52 publications

Using an Artificial Neural Networks Experiment to Assess the Links among Financial Development and Growth in Agriculture

Using an Artificial Neural Networks Experiment to Assess the Links among Financial Development and Growth in Agriculture

The Relationship Between the Development of the Financial Sector and the Economic Growth in the Republic of North Macedonia

Does Financial Sector Development Enhance the Relationship between FDI and Economic Growth? A Comparative Study of East African Countries

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