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Financial Globalization and Economic Growth in Sub-Saharan Africa: Evidence from Panel Cointegration Tests

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  • Tajudeen Egbetunde
  • Anthony Enisan Akinlo

Abstract

type="main" xml:lang="en"> This paper examines the long-run relationship between financial globalization and economic growth in sub-Saharan Africa using panel unit root tests, panel cointegration tests and panel multivariate ECM. The study finds that the variables are stationary at first difference — I(1). Also, the results reveal that all the variables are cointegrated, that is, they are related in the long run. The results of the ECT test within the framework of panel multivariate ECM confirm the cointegration tests. The paper concludes that there is a long-run relationship between financial globalization and economic growth in sub-Saharan Africa. The paper argues that sub-Saharan African economies will benefit from the era of financial globalization in the long run in as much as the governments promote and encourage sound macroeconomic policies and strong institutions.

Suggested Citation

  • Tajudeen Egbetunde & Anthony Enisan Akinlo, 2015. "Financial Globalization and Economic Growth in Sub-Saharan Africa: Evidence from Panel Cointegration Tests," African Development Review, African Development Bank, vol. 27(3), pages 187-198, September.
    • Handle: RePEc:bla:afrdev:v:27:y:2015:i:3:p:187-198
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    Cited by:

    1. Zhao, Bingyu & Yang, Wanping, 2020. "Does financial development influence CO2 emissions? A Chinese province-level study," Energy, Elsevier, vol. 200(C).
    2. Tibebe A. Assefa & André Varella Mollick, 2017. "Financial Development and Economic Growth in Africa," Journal of African Business, Taylor & Francis Journals, vol. 18(3), pages 320-339, July.
    3. Bataka, Hodabalo, 2021. "Globalization and Environmental Pollution in Sub-Saharan Africa," African Journal of Economic Review, African Journal of Economic Review, vol. 9(1), January.
    4. Idode Patrick & Sanusi Gbenga, 2019. "Financial Globalisation and Economic Transformation in Africa: Evidence from Nigeria," Financial Sciences. Nauki o Finansach, Sciendo, vol. 24(1), pages 7-24, March.
    5. Nyang`oro Owen, 2017. "Working Paper 285 - Capital Inflows and Economic Growth in Sub-Saharan Africa," Working Paper Series 2409, African Development Bank.
    6. Md. Sabbir Hossain & Md. Golam Kibria & Md. Shafiqul Islam, 2018. "Does Globalization Affect the Economic Growth of Bangladesh? - An Econometric Analysis," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(12), pages 1384-1393, December.
    7. Michael Effah Asamoah & Imhotep Paul Alagidede & Frank Adu, 2021. "Private Capital Flows, Real Sector Growth and Institutional Quality in Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(1), pages 171-207, January.
    8. Ibhagui, Oyakhilome W., 2020. "The Economic Performance Effects of Capital Flows in OPEC Member Countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 75(C), pages 67-83.
    9. Yakubu, Ibrahim Nandom, 2022. "Exploring the Drivers of Economic Growth in Sub-Saharan Africa: The Interactive Effect of Globalization and Financial Development," MPRA Paper 115230, University Library of Munich, Germany.
    10. Jonathan E. Ogbuabor & Anthony Orji & Charles O. Manasseh & Onyinye I. Anthony-Orji, 2020. "Institutional Quality and Growth in West Africa: What Happened after the Great Recession?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 26(4), pages 343-361, November.
    11. Svetlana S. Morkovina & Alexandr S. Natsubidze & Margarita S. Irizepova & Nikolai G. Sinyavsky & Vladimir V. Chashchin, 2016. "Transnational Business as a Manifestation of the Integration of the Global Economy and a Driving Force of its Development," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 10(4), December.
    12. Safwat Alaa & Salah Ashraf & Elsherif Marwa, 2021. "The Impact of Foreign Direct Investment on the Economic Growth of Egypt (1980-2018)," International Journal of Economics and Financial Issues, Econjournals, vol. 11(5), pages 74-85.
    13. Alade Olajide RAJI & Rasheed Adegboga AFOLABI & Titilayo Abiodun OSINUGA, 2021. "Financial Globalisation and the Performance of Nigerian Deposit Money Bank," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 3, pages 5-11.
    14. Ze, Fu & Yu, Wence & Ali, Anis & Hishan, Sanil S. & Muda, Iskandar & Khudoykulov, Khurshid, 2023. "Influence of natural resources, ICT, and financial globalization on economic growth: Evidence from G10 countries," Resources Policy, Elsevier, vol. 81(C).
    15. André Dumas Tsambou & Christian Zamo Akono & Ludwick Ndokang Esone & Roger Tsafack Nanfosso, 2017. "Financement Bancaire des Petites et Moyennes Entreprises au Cameroun," African Development Review, African Development Bank, vol. 29(4), pages 648-659, December.
    16. Stéphane Mbiankeu Nguea & Hervé Kaffo Fotio & Louise Angèle Baida, 2022. "Investigating the effects of globalization on economic sophistication in selected African countries," African Development Review, African Development Bank, vol. 34(3), pages 324-338, September.
    17. Davidmac O. Ekeocha & Jonathan E. Ogbuabor & Patterson C. Ekeocha & Anthony Orji, 2023. "Analysis of Sectoral Outcomes and Institutional Quality Nexus in Sub-Saharan Africa," SAGE Open, , vol. 13(4), pages 21582440231, October.

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