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Regional financial integration and inclusive growth in African franc zone countries

Author

Listed:
  • Alain Biakolo Onana

    (University of Yaounde II)

  • Xaverie-Euphemie Okah Atenga

    (University of Yaounde II)

  • Mohaman Gabdo Tamboutou

    (University of Yaounde II)

  • Bmermoz Homere III Nsoga Nsoga

    (University of Yaounde II)

Abstract

The objective of this paper is to empirically determine the impact of regional financial integration on inclusive growth for the 15 African countries of the franc zone. To achieve this, we first proceed methodologically to construct the inclusive growth index that takes into account the informal sector by adopting the principal component analysis and the composite index calculation technique. Then, through recent econometric developments such as: ordinary least squares (OLS), double least squares (DLS), we establish the impact of RFI on this inclusive growth index between 1995 and 2015. The main results show that the low level of regional financial integration has a negative effect on the inclusive growth of the LICs despite the inclusion of the informal sector. However, although the capital account is liberated, negative inclusive growth is still observed. These results therefore provide a major basis for governments to ensure not only the improvement of the quality of institutions, particularly government efficiency and regulation, but also the implementation of policies aimed more at fostering regional financial integration in order to achieve more inclusive growth.

Suggested Citation

  • Alain Biakolo Onana & Xaverie-Euphemie Okah Atenga & Mohaman Gabdo Tamboutou & Bmermoz Homere III Nsoga Nsoga, 2022. "Regional financial integration and inclusive growth in African franc zone countries," Economics Bulletin, AccessEcon, vol. 42(3), pages 1230-1248.
    • Handle: RePEc:ebl:ecbull:eb-22-00201
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    References listed on IDEAS

    as
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    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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