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Banking sector intermediation and economic growth: new evidence from CEMAC countries

Author

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  • Pierre Axel Louembé
  • Man Wang
  • Dilesha Nawadali Rathnayake

Abstract

An abundant body of literature explores the impact of finance on economic growth. However, only a few studies examine this link for developing economies. This paper investigates the banking intermediation-growth nexus with respect to the Central African Economic and Monetary Community (CEMAC). Making use of two panel estimation techniques, we exert the positive influence of banking sector intermediation on long-run growth over the studied period (1990-2016). Despite finding a negative association between financial development proxies and growth, our results suggest that the banking system in CEMAC still performs its main function of pooling and allocating financial resources. The latter is evidenced by the positive association between credit proxies (domestic credit to the private sector and bank credit to bank deposits) and growth/fixed capital formation.

Suggested Citation

  • Pierre Axel Louembé & Man Wang & Dilesha Nawadali Rathnayake, 2023. "Banking sector intermediation and economic growth: new evidence from CEMAC countries," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 13(1), pages 22-40.
    • Handle: RePEc:ids:afasfa:v:13:y:2023:i:1:p:22-40
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