Financial Development and Economic Growth: The Experience of 10 Sub-Saharan African Countries Revisited
The paper examines the long run and causal relationship between financial development and economic growth for ten countries in sub-Saharan Africa. Using the vector error correction model (VECM), the study finds that financial development is cointegrated with economic growth in the selected ten countries in sub-Saharan Africa. That is there is a long run relationship between financial development and economic growth in the selected sub-Saharan African countries. The results show that financial development Granger causes economic growth in Central African Republic, Congo Republic, Gabon, and Nigeria while economic growth Granger causes financial development in Zambia. However, bidirectional relationship between financial development and economic growth was found in Kenya, Chad, South Africa, Sierra Leone and Swaziland. The results show the need to develop the financial sector through appropriate regulatory and macroeconomic policies. However, in Zambia emphasis needs to be placed on economic growth to propel financial development.
Volume (Year): 02 (2010)
Issue (Month): 1 (June)
|Contact details of provider:|| Postal: Strada Mihai Eminescu nr.13-15, sector 1, Bucuresti, Romania|
Web page: http://www.fin.ase.ro/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Philip Arestis & Panicos O. Demetriades & Kul B. Luintel, 1997.
"Financial Development and Economic Growth: the Role of Stock Markets,"
Keele Department of Economics Discussion Papers (1995-2001)
97/05, Department of Economics, Keele University.
- Arestis, Philip & Demetriades, Panicos O & Luintel, Kul B, 2001. "Financial Development and Economic Growth: The Role of Stock Markets," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(1), pages 16-41, February.
- Suleiman Abu-Bader & Aamer Abu-Qarn, 2005.
"Financial Development and Economic Growth: Time Series Evidence from Egypt,"
206, Ben-Gurion University of the Negev, Department of Economics.
- Abu-Bader, Suleiman & Abu-Qarn, Aamer, 2005. "Financial Development and Economic Growth: Time Series Evidence from Egypt," MPRA Paper 1113, University Library of Munich, Germany.
- Demirguc-Kunt, Asli & Levine, Ross, 2008. "Finance, financial sector policies, and long-run growth," Policy Research Working Paper Series 4469, The World Bank.
- Suleiman Abu-Bader & Aamer S. Abu-Qarn, 2008. "Financial Development and Economic Growth: Empirical Evidence from Six MENA Countries," Review of Development Economics, Wiley Blackwell, vol. 12(4), pages 803-817, November.
When requesting a correction, please mention this item's handle: RePEc:rfb:journl:v:02:y:2010:i:1:p:017-028. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tatu Lucian)
If references are entirely missing, you can add them using this form.