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Financial development, trade openness and economic growth in African countries: New insights from a panel causality approach

  • Menyah, Kojo
  • Nazlioglu, Saban
  • Wolde-Rufael, Yemane
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    This paper examines the causal relationship between financial development and economic growth for 21 African countries within a framework which also accounts for international trade. We develop a financial development index based on four different financial development indicators and apply the panel bootstrapped approach to Granger causality. The empirical results show limited support for the finance-led growth and the trade-led growth hypotheses. The results imply that recent attempts at financial development and trade liberalization do not seem to have made a significant impact on growth.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0264999313005476
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    Article provided by Elsevier in its journal Economic Modelling.

    Volume (Year): 37 (2014)
    Issue (Month): C ()
    Pages: 386-394

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    Handle: RePEc:eee:ecmode:v:37:y:2014:i:c:p:386-394
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

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