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Financial development and growth in sub-Saharan Africa: do legal origin and CFA membership matter?

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  • Djeto Assane
  • Bernard Malamud

Abstract

This article examines whether relations between legal origin, financial development and economic growth that hold worldwide hold in British and French legal origin Sub-Saharan Africa (SSA) as well. We also test for the differential impacts on financial development and on growth of Communaute Financiere Africaine (CFA) currency union membership within French legal origin SSA. Our panel regressions and descriptive measures agree with the findings of British legal origin advantage with respect to financial development. In addition, financial development contributes positively to economic growth in British legal origin SSA, as it does worldwide. Within French legal origin SSA, we find that currency union constraints tend to hinder financial development in CFA countries beyond the negative impacts of French legal origin. Moreover, contributions to the growth of various indicators of financial development in French legal origin SSA are negative or insignificant irrespective of CFA membership.

Suggested Citation

  • Djeto Assane & Bernard Malamud, 2010. "Financial development and growth in sub-Saharan Africa: do legal origin and CFA membership matter?," Applied Economics, Taylor & Francis Journals, vol. 42(21), pages 2683-2697.
    • Handle: RePEc:taf:applec:v:42:y:2010:i:21:p:2683-2697
    DOI: 10.1080/00036840801964591
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    References listed on IDEAS

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    1. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2003. "Law, endowments, and finance," Journal of Financial Economics, Elsevier, vol. 70(2), pages 137-181, November.
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    1. Babatounde Ifred Paterne Zonon, 2021. "Regional Stock Exchange Development and Economic Growth in the Countries of the West African Economic and Monetary Union (WAEMU)," Economies, MDPI, vol. 9(4), pages 1-19, November.
    2. Asngar, Thierry Mamadou & Nkoa, Bruno Emmanuel Ongo & Zambo, Charles Christian Atangana, 2022. "Does colonisation explain the low level of growth in African financial markets?," Economic Systems, Elsevier, vol. 46(3).

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