Financial Globalisation and Financial Development in Africa: Assessing Marginal, Threshold and Net Effects

Asongu, Simplice; Moor, Lieven De

doi:10.2139/ssrn.2666977

Cited by 4 publications

(5 citation statements)

References 35 publications

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“…This has greatly affected intermediation efficiency because savings are not fully exploited by financial institutions. This discourse also aligns with the stream of literature suggesting that some initial conditions may be essential in order to materialize the financial development benefits from globalization (Henry, 2007;Asongu, 2014b;Asongu & De Moor, 2015. As a policy implication, public information sharing offices like public credit registries and private credit bureaus which contribute to reducing information asymmetry may be relevant initial conditions for the rewards in financial allocation efficiency from globalization-fuelled regionalization policies.…”

Section: Further Discussion and Implicationssupporting

confidence: 65%

“…Selected control variables are consistent with recent financial development literature, namely: GDP growth, inflation, public investment and foreign aid (Asongu, 2014b;Asongu & De Moor, 2015). The relationship between economic growth and financial development has been substantially documented in the literature.…”

Section: Globalization Financial and Control Variablessupporting

confidence: 58%

“…Second, both empirical (Boyd et al, 2001) and theoretical (Huybens & Smith, 1999) views maintain that higher levels of inflation are associated with less efficient, less active and smaller financial institutions. Essentially, macroeconomic policies conducive to low/stable inflation and higher levels of investment have been documented to be associated with higher levels of financial development (Asongu, 2014b;Asongu & De Moor, 2015). Third, a positive relationship between investment and financial development has also been established in the literature (Huang, 2011).…”

Section: Globalization Financial and Control Variablesmentioning

confidence: 96%

“…Moreover, the concern in openness variables is addressed by employing them in distinct specifications. Given that the specification consists of interactive regressions, it is important to note that contrary to linear additive models, multicollinearity is not an issue with interactive models (Brambor et al, 2006;Asongu & De Moor, 2015. This is essentially because the effect of the interactive policy variable of regionalization is considered as a conditional marginal impact.…”

Section: Globalization Financial and Control Variablesmentioning

confidence: 99%

See 3 more Smart Citations

The Comparative African Regional Economics of Globalization in Financial Allocation Efficiency: Pre-Crisis Era Revisited

Asongu

Nnanna²,

Tchamyou

2019

SSRN Journal

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The study assesses the role of globalization-fuelled regionalization policies on financial allocation efficiency in four economic and monetary regions in Africa for the period 1980 to 2008. Banking system and financial system efficiency proxies are used as dependent variables whereas seven bundled and unbundled globalization variables are employed as independent indicators. The bundling exercise is achieved by means of principal component analysis while the empirical evidence is based on interactive Fixed Effects regressions. The following findings are established. First, financial allocation efficiency is more sensitive to financial openness compared to trade openness and most sensitive to globalization. The relationship between allocation efficiency and globalization-fuelled regionalization policies is: (i) Kuznets or inverted U-shape in the UEMOA and CEMAC zones (evidence of decreasing returns to allocation efficiency from globalization-fuelled regionalization) and (ii) U-shape overwhelmingly in the COMESA and scantily in the EAC (increasing returns to allocation efficiency from globalization-fuelled regionalization). Established shapes are relevant to specific globalization dynamics within regions. Economic and monetary regions are more prone to surplus liquidity than purely economic regions. Policy implications and measures of fighting surplus liquidity are discussed.

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Section: Further Discussion and Implicationssupporting

confidence: 65%

Section: Globalization Financial and Control Variablessupporting

confidence: 58%

Section: Globalization Financial and Control Variablesmentioning

confidence: 96%

Section: Globalization Financial and Control Variablesmentioning

confidence: 99%

See 2 more Smart Citations

The Comparative African Regional Economics of Globalization in Financial Allocation Efficiency: Pre-Crisis Era Revisited

Asongu

Nnanna²,

Tchamyou

2019

SSRN Journal

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“…Consistent with the work of Asongu & De Moor (2015), Moreover, the study used net BOP current USD Dollar for FDI and GDP annual percentage for economic growth. Hence, the data is generated from World Development Indicators (WDI, 2019) as well as the International Monetary Fund (2019).…”

Section: Datamentioning

confidence: 99%

The Effect of Flow of Funds Uncertainty on Financial Development in Some Selected African Countries

Farouq¹,

Sulong²,

Sambo³

2021

JSSM

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The purpose of this paper is to analyze the effects of financial globalisation uncertainty on financial development, included in the model are foreign direct investment and economic growth as control variables to avoid the misspecification of variables. This paper analyzed the effects based on the panel data analysis using the Westerlund cointegration method, Pooled Mean Group estimator and Dumitrescu and Hurlin causality test of eight top African economies, from 1970-2018. The result of the co-integration showed a long-run relationship between the variables with and without structural breaks. Also, there exists a bidirectional causality relationship between financial development and financial globalisation uncertainty.

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The impact of entrepreneurship on knowledge economy in Africa

Asongu

Tchamyou

2016

Journal of Entrepreneurship in Emerging Economies

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Purpose -The paper assesses how entrepreneurship affects knowledge economy (KE) in Africa.Design/methodology/approach -Entrepreneurship is measured by indicators of starting, doing and ending business. The four dimensions of the World Bank's index of KE are employed. Instrumental variable panel fixed effects are applied on a sampled of 53 African countries for the period 1996-2010.Findings -The following are some findings. First, creating an enabling environment for starting business can substantially boost most dimensions of KE. Second, doing business through mechanisms of trade globalisation has positive effects from sectors that are not ICT and High-tech oriented. Third, the time required to end business has negative effects on KE.Practical implications -Our findings confirm the narrative that the technology in African countries at the moment may be more imitative and adaptive for reverse-engineering in ICTs and high-tech products. Given the massive consumption of ICT and high-tech commodities in Africa, the continent has to start thinking of how to participate in the global value chain of producing what it consumes.Originality/value -This paper has a twofold motivation. First, given the ambitions of African countries of moving towards knowledge based economies, the line of inquiry is timely. Second, investigating the nexus may have substantial poverty mitigation and sustainable development implications. These entail inter alia: the development of technology with value-added services; enhancement of existing agricultural practices; promotion of conditions that are essential for competitiveness and adjustment of globalization challenges.

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Financial Globalisation and Financial Development in Africa: Assessing Marginal, Threshold and Net Effects

Cited by 4 publications

References 35 publications

The Comparative African Regional Economics of Globalization in Financial Allocation Efficiency: Pre-Crisis Era Revisited

The Comparative African Regional Economics of Globalization in Financial Allocation Efficiency: Pre-Crisis Era Revisited

The Effect of Flow of Funds Uncertainty on Financial Development in Some Selected African Countries

The impact of entrepreneurship on knowledge economy in Africa

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