Advanced Search
MyIDEAS: Login to save this article or follow this journal

Financial structure and economic growth link in African countries: a panel cointegration analysis

Contents:

Author Info

  • Abdullahi D. Ahmed
  • Abu N.M. Wahid

Abstract

Purpose – This paper aims to use the newly developed panel data cointegration analysis and the dynamic time series modeling approach to examine the linkages between financial structure (market-based vs bank-based) and economic growth in African economies. Design/methodology/approach – The research investigates the dynamic relationship between financial structure and economic growth in a panel of a group of seven African developing countries over the period of 1986-2007. The paper uses various indicators/measures of financial structure and financial system, and employs the traditional time-series analysis for causality as well as the newly developed panel unit root and cointegration techniques and estimated finance-growth relationship using FMOLS for heterogeneous panel. Findings – From the dynamic heterogeneous panel approach, the paper firstly finds that market-based financial system is important for explaining output growth through enhancing efficiency and productivity. Second, the authors' empirical evidence supports the view that higher levels of banking system development are positively associated with capital accumulation growth and lead to faster rates of economic growth. Originality/value – Panel cointegration, group mean panel FMOLS and country-by-country time series investigations indicate that the market-based financial system is important for explaining output growth through enhancing efficiency and productivity, whereas the development of banking system is significantly associated with capital accumulation growth. Further results from the time-series approach show evidence of unidirectional causality running from market-oriented as well as bank-oriented financial systems to economic growth.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.emeraldinsight.com/journals.htm?issn=0144-3585&volume=38&issue=3&articleid=1941442&show=abstract
Download Restriction: Cannot be freely downloaded

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Emerald Group Publishing in its journal Journal of Economic Studies.

Volume (Year): 38 (2011)
Issue (Month): 3 (July)
Pages: 331-357

as in new window
Handle: RePEc:eme:jespps:v:38:y:2011:i:3:p:331-357

Contact details of provider:
Web page: http://www.emeraldinsight.com

Order Information:
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Email:
Web: http://www.emeraldinsight.com/jes.htm

Related research

Keywords: Economic growth; Financial structure; Panel Cointegration; Sub Saharan Africa;

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Kurt A. Hafner & David Mayer-Foulkes, 2012. "Fertility, Human Development, and Economic Growth: Long- term Short-term Causal Links," DEGIT Conference Papers c017_024, DEGIT, Dynamics, Economic Growth, and International Trade.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eme:jespps:v:38:y:2011:i:3:p:331-357. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.