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African financial development dynamics: big time convergence

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  • Simplice A. Asongu

Abstract

Purpose - – Assessment of African financial development dynamic convergences in money, credit, efficiency and size. The paper aims to discuss these issues. Design/methodology/approach - – The empirical evidence is premised on 11 homogenous panels based on regions (Sub-Saharan and North Africa), income-levels (low, middle, lower-middle and upper-middle), legal-origins (English common-law and French civil-law) and religious dominations (Christianity and Islam). The paper examines convergence in financial intermediary dynamics of depth, efficiency, activity and size. Findings - – Findings suggest that countries with small-sized financial intermediary depth, efficiency, activity and size are catching-up countries with large-sized financial intermediary depth, efficiency, activity and size, respectively. The paper also provide the speeds of convergence and time necessary to achieve a full (100 percent) convergence. Practical implications - – The presence of strong links among African banking sectors may present little opportunity for portfolio diversification. The convergence patterns show positive steps toward regional integration. As a policy implication, African governments should not relent in structural and institutional reforms. Originality/value - – It is the first critical assessment of convergence in financial intermediary development dynamics in the African continent.

Suggested Citation

  • Simplice A. Asongu, 2014. "African financial development dynamics: big time convergence," African Journal of Economic and Management Studies, Emerald Group Publishing Limited, vol. 5(2), pages 160-194, July.
    • Handle: RePEc:eme:ajemsp:v:5:y:2014:i:2:p:160-194
    DOI: 10.1108/AJEMS-06-2012-0037
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    Cited by:

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    3. Simplice Asongu, 2016. "New empirics of monetary policy dynamics: evidence from the CFA franc zones," African Journal of Economic and Management Studies, Emerald Group Publishing Limited, vol. 7(2), pages 164-204, June.
    4. Simplice A Asongu, 2013. "Modeling the future of knowledge economy: evidence from SSA and MENA countries," Economics Bulletin, AccessEcon, vol. 33(1), pages 612-624.
    5. Simplice Asongu, 2013. "Harmonizing IPRs on Software Piracy: Empirics of Trajectories in Africa," Journal of Business Ethics, Springer, vol. 118(1), pages 45-60, November.
    6. Asongu Simplice, 2013. "Does Money Matter in Africa? New Empirics on Long- and Short-run Effects of Monetary Policy on Output and Prices," Working Papers of the African Governance and Development Institute. 13/005, African Governance and Development Institute..
    7. Asongu Simplice, 2014. "Fresh Patterns of Liberalization, Bank Return and Return Uncertainty in Africa," Working Papers of the African Governance and Development Institute. 14/004, African Governance and Development Institute..
    8. Simplice A. Asongu, 2017. "Knowledge Economy Gaps, Policy Syndromes, and Catch-Up Strategies: Fresh South Korean Lessons to Africa," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(1), pages 211-253, March.
    9. Simplice A. Asongu, 2015. "Law,Finance, Economic Growth and Welfare: Why Does Legal Origin Matter?," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 7(2), pages 30-55, July.
    10. Shobande, Olatunji A. & Asongu, Simplice A., 2022. "The Critical Role of Education and ICT in Promoting Environmental Sustainability in Eastern and Southern Africa: A Panel VAR Approach," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    11. Simplice Anutechia Asongu & Antonio Andrés, 2014. "Global trajectories, dynamics, and tendencies of business software piracy: benchmarking IPRs harmonization," AAYE Policy Research Working Paper Series 14_023, Association of African Young Economists, revised Nov 2014.
    12. Simplice A Asongu, 2013. "The ‘Knowledge Economy'-finance nexus: how do IPRs matter in SSA and MENA countries?," Economics Bulletin, AccessEcon, vol. 33(1), pages 78-94.
    13. Asongu Simplice, 2013. "Fighting African capital flight: timelines for the adoption of common policies," Working Papers of the African Governance and Development Institute. 13/008, African Governance and Development Institute..
    14. Simplice A, Asongu, 2012. "Fighting software piracy: which IPRs laws (treaties) matter in Africa?," MPRA Paper 43590, University Library of Munich, Germany.
    15. Simplice A. Asongu, 2014. "The “knowledge economy”–finance nexus in SSA and MENA countries," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 7(2), pages 200-213, June.
    16. Christian Lambert NGUENA & Roger TSAFACK NANFOSSO, 2014. "Macroeconomic Factors and Dynamics of Financial Deepening: An empirical Investigation applied to the CEMAC Sub-region," Research Africa Network Working Papers 14/015, Research Africa Network (RAN).
    17. Simplice A. Asongu, 2014. "Fighting African Capital Flight: Empirics on Benchmarking Policy Harmonization," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 11(1), pages 93-122, June.
    18. Simplice A. Asongu, 2014. "Finance and Democracy in Africa," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 6(3), pages 92-116, October.
    19. Simplice A Asongu, 2013. "A Short-run Schumpeterian Trip to Embryonic African Monetary Zones," Economics Bulletin, AccessEcon, vol. 33(1), pages 859-873.
    20. Asongu Simplice, 2011. "Government Quality Determinants of Stock Market Performance in African Countries," Working Papers of the African Governance and Development Institute. 11/019, African Governance and Development Institute..
    21. Simplice Asongu, 2014. "African Development: Beyond Income Convergence," South African Journal of Economics, Economic Society of South Africa, vol. 82(3), pages 334-353, September.

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    More about this item

    Keywords

    Africa; Banking; Convergence; Policy coordination;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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