The finance‐growth nexus in Sub‐Saharan Africa: Panel cointegration and causality tests
AbstractThis paper examines the causal relationship between financial development and economic growth using data for 17 countries in Sub-Saharan Africa. The analysis is conducted using panel cointegration and causality tests which take account of heterogeneity between countries which arises as a result of different country intercepts and varying regression coefficients slopes across countries. The results show that there is homogenous bi‐directional causality between financial development and economic growth. This result is robust to alternative measures of financial development and implies that for these Sub‐Saharan African countries, both the real and financial sectors are complementary to each other and their simultaneous development should be encouraged. Copyright (C) 2010 John Wiley & Sons, Ltd.
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Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.
Volume (Year): 23 (2011)
Issue (Month): 2 (March)
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Web page: http://www3.interscience.wiley.com/journal/5102/home
financial development ; economic growth ; panel cointegration ; panel causality ; O16; O23; E44; G18; G28 ;
Find related papers by JEL classification:
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- 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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