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Financialization and Economic Growth Nexus in South Africa

Author

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  • Mahlatse MABEBA

    (Corvinus University of Budapest)

Abstract

We empirically investigate the effects of financialization on economic growth in South Africa. The country experienced increases in the share of the financial sector since the democratic dispensation. This country is also one of the few developing countries with a large financial market. The sample period includes a long-run horizon from 1994 to 2021. The study applies quantile regression methodology which we use to explain the effects of financialization at different levels of economic growth. We estimate the effects of financialization at the 25th, 50th, 75th percentile of economic growth. The key measure of financialization is the finance gross value added and the measure of economic growth is the gross domestic product. We find that financialization has a significantly high and positive effect only at all the levels of economic growth. From the different percentiles, financialization contributes more to higher levels of economic growth.

Suggested Citation

  • Mahlatse MABEBA, 2023. "Financialization and Economic Growth Nexus in South Africa," Journal of Economics and Financial Analysis, Tripal Publishing House, vol. 7(1), pages 61-78.
    • Handle: RePEc:trp:01jefa:jefa0064
    DOI: 10.1991/jefa.v7i1.a59
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    References listed on IDEAS

    as
    1. Bondt Gabe J. de, 2005. "Interest Rate Pass-Through: Empirical Results for the Euro Area," German Economic Review, De Gruyter, vol. 6(1), pages 37-78, February.
    2. Akinci, Gönül Yüce & Akinci, Merter & Yilmaz, Ömer, 2014. "Financial Development-Economic Growth Nexus : A Panel Data Analysis Upon Oecd Countries," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 55(1), pages 33-50, June.
    3. Agbloyor, Elikplimi Komla & Abor, Joshua Yindenaba & Adjasi, Charles Komla Delali & Yawson, Alfred, 2014. "Private capital flows and economic growth in Africa: The role of domestic financial markets," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 30(C), pages 137-152.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Financialization; Economic Growth; Quantile Regression; South Africa.;
    All these keywords.

    JEL classification:

    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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