IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

On the substitution of institutions and finance in investment

Author Info

  • Asongu Simplice

    ()

    (Yaoundé/Cameroun)

Abstract

The Ali (2013, EB) findings on the nexuses among institutions, finance and investment could have an important influence on policy and academic debates. This paper relaxes his hypotheses on the conception, definition and measurement of finance and institutions because they are less realistic to developing countries to which the resulting policy implications are destined. We dissect with great acuteness the contextual underpinnings of financial development dynamics and elucidate why the Acemoglu & Johnson (2005) justification provided for the measurement of property rights institutions (PRI) is lacking in substance. Using updated data (1996-2010) from 53 African countries, we provide more robust evidence on the substitution of institutions and finance in investment. Results under many baseline and augmented scenarios are not consistent with the underlying paper. Justifications for the differences in findings are discussed. As a policy implication, the Ali (2013, EB) findings for countries with poor financial systems may not be relevant for Africa.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.afridev.org/RePEc/agd/agd-wpaper/On-the-substitution-of-institutions-and-finance-in-investment.pdf
File Function: Revised version, 2013
Download Restriction: no

Paper provided by African Governance and Development Institute. in its series Working Papers with number 14/005.

as
in new window

Length: 24
Date of creation: Jan 2014
Date of revision:
Handle: RePEc:agd:wpaper:14/005
Contact details of provider: Web page: http://www.afridev.org/index.php/en/
Email:


More information through EDIRC

Keywords: Finance; Institutions; Investment: Property Rights; Africa;

Other versions of this item:

Find related papers by JEL classification:
  • G20 - Financial Economics - - Financial Institutions and Services - - - General
  • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
  • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
  • P14 - Economic Systems - - Capitalist Systems - - - Property Rights
  • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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.:

as in new window
  1. Daron Acemoglu & Simon Johnson, 2003. "Unbundling Institutions," NBER Working Papers 9934, National Bureau of Economic Research, Inc.
  2. Asongu Simplice, 2011. "Government Quality Determinants of Stock Market Performance in African Countries," Working Papers 11/019, African Governance and Development Institute..
  3. Simplice A. ASONGU, 2011. "Why Do French Civil–Law Countries Have Higher Levels Of Financial Efficiency?," Journal of Advanced Research in Law and Economics, ASERS Publishing, vol. 0(2), pages 94-108, December.
  4. Fosu, Augustin Kwasi, 2013. "Growth of African Economies : Productivity, Policy Syndromes, and the Importance of Institutions," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  5. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
  6. Asongu Simplice, 2012. "Globalization, (fighting) corruption and development: how are these phenomena linearly and nonlinearly related in wealth effects?," Working Papers 12/024, African Governance and Development Institute..
  7. Asongu, Simplice A, 2012. "Correcting inflation with financial dynamic fundamentals: which adjustments matter in Africa?," MPRA Paper 46424, University Library of Munich, Germany, revised 14 Apr 2013.
  8. Asongu Simplice, 2012. "A Short-run Schumpeterian Trip to Embryonic African Monetary Zones," Working Papers 12/001, African Governance and Development Institute..
  9. Lalountas, Dionisios A. & Manolas, George A. & Vavouras, Ioannis S., 2011. "Corruption, globalization and development: How are these three phenomena related?," Journal of Policy Modeling, Elsevier, vol. 33(4), pages 636-648, July.
  10. Michael Enowbi-Batuo & Mlambo Kupukile, 2010. "How can economic and political liberalisation improve financial development in African countries?," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 2(1), pages 35-59, May.
  11. Asongu Simplice, 2013. "Inequality, poverty and quality of institutions: which freedom channels of globalization matter for Africa?," Working Papers 13/014, African Governance and Development Institute..
  12. Simplice A. Asongu, 2013. "Fighting consumer price inflation in Africa: What do dynamics in money, credit, efficiency and size tell us?," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 5(1), pages 39-60, February.
  13. Simplice A Asongu, 2013. "How do financial reforms affect inequality through financial sector competition? Evidence from Africa," Economics Bulletin, AccessEcon, vol. 33(1), pages 401-414.
  14. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
  15. Simplice A Asongu, 2013. "How has politico-economic liberalization affected financial allocation efficiency? Fresh African evidence," Economics Bulletin, AccessEcon, vol. 33(1), pages 663-676.
  16. Augustin Kwasi Fosu, 2013. "Institutions and African Economies: An Overview," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 22(4), pages 491-498, August.
  17. Asongu Simplice & Michael E. Batuo, 2012. "The Impact of Liberalisation Policies on Inequality in Africa," Working Papers 12/038, African Governance and Development Institute..
  18. Asongu Simplice & Aminkeng Gilbert, 2013. "The Economic Consequences of China-Africa Relations: Debunking Myths in the Debate," Working Papers 13/020, African Governance and Development Institute..
  19. Bond, Stephen Roy & Hoeffler, Anke & Temple, Jonathan, 2001. "GMM Estimation of Empirical Growth Models," CEPR Discussion Papers 3048, C.E.P.R. Discussion Papers.
  20. Simplice A. Asongu, 2013. "How has Mobile Phone Penetration Stimulated Financial Development in Africa?," Journal of African Business, Taylor & Francis Journals, vol. 14(1), pages 7-18, April.
  21. Simplice A, Asongu, 2012. "Financial development dynamic thresholds of financial globalization: evidence from Africa," MPRA Paper 44254, University Library of Munich, Germany.
  22. Asongu Simplice, 2012. "Harmonizing IPRs on Software Piracy: Empirics of Trajectories in Africa," Working Papers 12/025, African Governance and Development Institute..
  23. Wade, Robert, 1985. "The market for public office: Why the Indian state is not better at development," World Development, Elsevier, vol. 13(4), pages 467-497, April.
  24. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
  25. Asongu Simplice, 2010. "Bank Efficiency and Openness in Africa: Do Income Levels Matter?," Working Papers 10/001, African Governance and Development Institute., revised 18 Dec 2011.
  26. Antonio Andrés & Simplice Asongu, 2013. "Fighting Software Piracy: Which Governance Tools Matter in Africa?," Journal of Business Ethics, Springer, vol. 118(3), pages 667-682, December.
  27. Stephen Bond & Anke Hoeffler, 2001. "GMM Estimation of Empirical Growth Models," Economics Series Working Papers 2001-W21, University of Oxford, Department of Economics.
  28. Henry Kaiser, 1974. "An index of factorial simplicity," Psychometrika, Springer;The Psychometric Society, vol. 39(1), pages 31-36, March.
  29. Magnus Saxegaard, 2006. "Excess Liquidity and Effectiveness of Monetary Policy; Evidence from Sub-Saharan Africa," IMF Working Papers 06/115, International Monetary Fund.
  30. Abdi Ali, 2013. "Are property rights institutions and financial development complements or substitutes? The case of private investment," Economics Bulletin, AccessEcon, vol. 33(2), pages 1126-1131.
  31. Federico Varese, 1997. "The Transition to the Market and Corruption in Post-socialist Russia," Political Studies, Political Studies Association, vol. 45(3), pages 579-596.
  32. Enowbi Batuo, Michael & Guidi, Francesco & Mlambo, Kupukile, 2010. "Financial Development and Income Inequality: Evidence from African Countries," MPRA Paper 25658, University Library of Munich, Germany.
  33. Enowbi Batuo, Michael & Asongu, Simplice A., 2012. "The impact of liberalisation policies on income inequality in african countries," MPRA Paper 43344, University Library of Munich, Germany.
Full references (including those not matched with items on IDEAS)

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

as in new window


Cited by:

  1. Simplice Asongu & Jacinta C. Nwachukwu, 2015. "A Good Turn Deserves Another: Political Stability, Corruption and Corruption-Control," Working Papers 15/039, African Governance and Development Institute..
  2. Simplice Asongu & Enowbi Batuo & Vanessa Tchamyou, 2015. "Bundling Governance: Finance versus Institutions in Private Investment Promotion," Working Papers 15/051, African Governance and Development Institute..
  3. Asongu, Simplice, 2014. "Reinventing foreign aid for inclusive and sustainable development: a survey," MPRA Paper 65300, University Library of Munich, Germany.
  4. Amavilah, Voxi & Asongu, Simplice A & Andrés, Antonio R, 2014. "Globalization, Peace & Stability, Governance, and Knowledge Economy," MPRA Paper 58756, University Library of Munich, Germany.
  5. Asongu, Simplice A. & Kodila-Tedika, Oasis, 2015. "On the Empirics of Institutions and Quality of Growth: Evidence for Developing Countries," MPRA Paper 70233, University Library of Munich, Germany.
  6. Asongu, Simplice, 2015. "Reinventing foreign aid for inclusive and sustainable development: Kuznets, Piketty and the great policy reversal," MPRA Paper 67307, University Library of Munich, Germany.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Access and download statistics

When requesting a correction, please mention this item's handle: RePEc:agd:wpaper:14/005. 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: (Asongu Simplice)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.