Private Investment and Financial Development in a Globalized World

Huang, Yongfu

doi:10.2139/ssrn.925012

Cited by 12 publications

(3 citation statements)

References 78 publications

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“…Trade openness is positively linked to financial development (Huang & Temple, 2005). Investment is also positively related to the outcome variable (Huang, 2011). Both empirical (Boyd, Levine, & Smith, 2001) and theoretical (Huybens & Smith, 1999) studies are in accordance with the perspective that countries with substantially high inflation are linked with smaller, less active, and less efficient banks.…”

Section: Datasupporting

confidence: 77%

Information asymmetry, financialization, and financial access

Asongu

Odhiambo

2018

International Finance

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This study investigates whether information sharing channels that are meant to reduce information asymmetry have led to an increase in financial access. The study employs a Generalized Method of Moments technique using data from 53 African countries during the period from 2004 to 2011 to examine this linkage. Information sharing channels are theoretically designed to promote the formal financial sector and discourage the informal financial sector. The study uses two information sharing channels: private credit bureaus and public credit registries. The study found that both information sharing channels have a positive and significant impact on financial access. The study also found that public credit registries complement the formal financial sector to promote financial access. Policy implications are discussed.

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Section: Datasupporting

confidence: 77%

Information asymmetry, financialization, and financial access

Asongu

Odhiambo

2018

International Finance

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“…First, on the former perspective, the findings are broadly consistent with Ahlin and Pang (2008) who have established a substitution effect: the positive impact of finance on growth decreases with the progress of institutions. Second, with regard to the latter strand, the absence of a finance‐led investment nexus is broadly inconsistent with the plethora of existing literature on, inter alia : developing (Huang 2006; Ndikumana 2000, 2005; Xu 2000); Asian (Rousseau and Vuthipadadorn 2005); European (Forssbaeck and Oxelheim 2008); and developed (Love and Zicchino 2006) countries. To be more specific about SSA, Misati and Nyamongo (2010) and Afangideh (2010) have also established a positive nexus.…”

Section: Discussion and Policy Implicationsmentioning

confidence: 99%

Finance, Institutions, and Private Investment in Africa

Asongu

Nnanna²,

Tchamyou

2021

Politics & Policy

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The study extends the debate on finance versus institutions and measurement of property rights institutions. We assess the relationships between various components of property rights institutions and private investment, notably: political, economic and institutional governances. Comparative concurrent relationships of financial dynamics of depth, efficiency, activity and size are also investigated. The findings provide support for the quality of institutions as a better positive correlate of private investment than financial intermediary development. The interaction of finance and governance is not significant in potentially promoting private investment, perhaps due to substantially documented surplus liquidity issues in African financial institutions. The empirical evidence is based on 53 African countries for the period 1996-2010. Policy measures are discussed for reducing financial deposits, increasing financial activity and hence, improving financial efficiency.

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“…Ndikumana (2000) has stressed that financial development is an important determinant of domestic investment. Following (Huang 2006), we create an index of financial development using principal component analysis. We consider the same measures that have been used by Huang (2006) to construct the index -private credit to deposit money banks as a percentage of GDP, liquid liabilities as a percentage of GDP and deposit money bank assets as a ratio of central bank assets and deposit money bank assets.…”

Section: Other Control Variablesmentioning

confidence: 99%

Re-examining the relationship between domestic investment and foreign aid: does political stability matter?

Dutta

Mukherjee

Roy³

2015

International Review of Applied Economics

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While past studies had conflicting conclusions regarding the impact of foreign aid on growth and development of a nation, recent studies have tried to delve deeper into the question, 'what makes aid work?' (see, Dutta, Leeson, and Williamson, 2013; Dollar, 2000, 2004;Svensson, 1999). This paper tests how political stability (vis-à-vis political instability) affects the relationship between domestic investment and foreign aid. Applying dynamic panel estimators, our results show that political stability affects aid's effectiveness on domestic capital formation. The paper considers alternative measures of political stability (vis-à-vis instability), focusing on the political characteristics of a system that have the potential to make a nation stable. Political stability affects policy selection by the government positively and, thus, public resources such as foreign aid are put to the desired use. The estimated marginal impacts show that foreign aid enhances domestic investment in the presence of a stable political climate, but there is a diminishing return to aid.

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Private Investment and Financial Development in a Globalized World

Cited by 12 publications

References 78 publications

Information asymmetry, financialization, and financial access

Information asymmetry, financialization, and financial access

Finance, Institutions, and Private Investment in Africa

Re-examining the relationship between domestic investment and foreign aid: does political stability matter?

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