Financial development, trade openness and economic growth in African countries: New insights from a panel causality approach

Menyah, Kojo; Nazlıoğlu, Şaban; Wolde‐Rufael, Yemane

doi:10.1016/j.econmod.2013.11.044

Cited by 466 publications

(249 citation statements)

References 42 publications

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“…As argued by Aghion, Bloom, Blundell, Grith, and Howitt (2005), financial constraints deter poor countries from maximizing the advantages of technology transfer, and in turn induce a diversion from the growth rate of the world frontiers. This position was further advanced by Fung (2009) and Menyah, Nazlioglu, and Wolde-Rufael (2014) who observed that economies with advanced financial development tend to grow faster and expand trade. Thus, financial development is both pro-growth and protrade.…”

Section: Introductionmentioning

confidence: 93%

Economic growth, financial development and trade openness in Nigeria: An application of the ARDL bound testing approach

Lawal

Nwanji

Asaleye

et al. 2016

Cogent Economics & Finance

106

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For over a decade now, various efforts have been put in place by various governments of the developing economies to promote economic growth, financial development and expand trade with mixed results. The ability of financial development and/or trade openness to influence economic growth in the developing economies has been a subject of hot debate and remains inconclusive. While a number of scholars are of the view that compelling cointegration exists among each of these constructs, another set of substantial authors have documented that economic growth, trade openness and financial development do evolve independent of each other. Drawing from four financial developments-growth nexus theories, this study used the ARDL bound estimation techniques to examine the existence of cointegration among economic growth, financial development and trade openness in Nigeria. We intend to know what policy instruments need to be manipulated so as to achieve economic growth and financial stability. Our results show that a two-way cointegration exists between economic growth and financial development, on the one hand, as well as between economic growth and trade openness, on the other hand. We therefore recommend that in order to achieve economic growth, policymakers should pursue strong financial development and increase trade openness.

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Section: Introductionmentioning

confidence: 93%

Economic growth, financial development and trade openness in Nigeria: An application of the ARDL bound testing approach

Lawal

Nwanji

Asaleye

et al. 2016

Cogent Economics & Finance

106

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“…Shahbaz and Lean (2012) found trade openness promote economic growth. Vehapi et al (2015) found significant relationship while Menyah et al (2014) found insignificant relationship between trade openness and economic growth.…”

Section: Datamentioning

confidence: 99%

Personal Income Tax and Economic Growth: A Comparative Study Between China and Pakistan

Amin

Huang

2018

Asian Journal of Economic Modelling

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“…Besides, trade policies such as average weighted tariff rate and real effective exchange rate affect economic performance through trade. Menyah, Nazlioglu, and Wolde-Rufael (2014) investigate the causal nexus among financial development, trade openness and economic growth for 21 Sub-Saharan African countries. They find limited support for the trade-led growth hypothesis.…”

Section: Literature Reviewmentioning

confidence: 99%

The impact of trade openness on economic growth: The case of Cote d’Ivoire

Keho

2017

Cogent Economics & Finance

391

193

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Abstract:The relationship between trade openness and economic growth has been extensively investigated yielding to mixed and inconclusive results. This might be attributed to the omission of the role of capital stock and labor in the trade-growth nexus. This paper examines the impact of trade openness on economic growth for Cote d'Ivoire over the period 1965-2014 in a multivariate framework including capital stock, labor and trade openness as regressors. It uses the Autoregressive Distributed Lag bounds test to cointegration and the Toda and Yamamoto Granger causality tests. The results show that trade openness has positive effects on economic growth both in the short and long run. Furthermore, they reveal a positive and strong complementary relationship between trade openness and capital formation in promoting economic growth.

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Financial development, trade openness and economic growth in African countries: New insights from a panel causality approach

Cited by 466 publications

References 42 publications

Economic growth, financial development and trade openness in Nigeria: An application of the ARDL bound testing approach

Economic growth, financial development and trade openness in Nigeria: An application of the ARDL bound testing approach

Personal Income Tax and Economic Growth: A Comparative Study Between China and Pakistan

The impact of trade openness on economic growth: The case of Cote d’Ivoire

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