Globalization, financial allocation efficiency and regional economic dynamics: asymmetric panel evidence from Africa
AbstractThis paper examines how regionalization in the face of globalization has affected financial development in the context of banking system efficiency in Africa. Results which are robust to financial system efficiency and growth-led-finance nexus reveal that in the post-regionalization era: (1) UEMOA and CEMAC regional banks’ ability to finance credit by deposits has reduced; (2) financial institutions of COMESA have improved their capacity to fund openness related activities/projects with deposits; (3) increase in welfare has positively affected the intermediary role of banks; (4) globalization tends to be more detrimental to financial systems of ‘economic and monetary’ regions than to those of purely economic regions. As a policy implication, national and regional authorities should gain knowledge of the fact that with openness, the role of domestic and regional banks seems to lessen in the funding of openness related activities and projects. Much needs to be done on the improvement of infrastructure that curtails information asymmetry in the banking industry.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 33901.
Date of creation: 19 Sep 2011
Date of revision:
Globalization; Financial Development; Regional Integration; Panel; Africa;
Find related papers by JEL classification:
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- D60 - Microeconomics - - Welfare Economics - - - General
- A10 - General Economics and Teaching - - General Economics - - - General
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
- P50 - Economic Systems - - Comparative Economic Systems - - - General
This paper has been announced in the following NEP Reports:
- NEP-AFR-2011-10-15 (Africa)
- NEP-ALL-2011-10-15 (All new papers)
- NEP-URE-2011-10-15 (Urban & Real Estate Economics)
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