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Financial crisis, financial globalisation and financial development in Africa

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  • Asongu, Simplice
  • Nnanna, Joseph

Abstract

This study unites two streams of research by simultaneously focusing on the impact of financial globalisation on financial development and pre- and post-crisis dynamics of the investigated relationship. The empirical evidence is based on 53 African countries for the period 2004-2011 and Generalised Method of Moments. The following findings are established. First, whereas marginal effects from financial globalisation are positive on financial dynamics of activity and size, corresponding net effects (positive thresholds) are negative (within range). Second, while decreasing financial globalisation returns are apparent to financial dynamics of depth and efficiency, corresponding net effects (negative thresholds) are positive (not within range). Third, financial development dynamics are more weakly stationary and strongly convergent in the pre-crisis period. Fourth, the net effect from the: pre-crisis period is lower on money supply and banking system efficiency; post-crisis period is positive on financial system efficiency and pre-crisis period is positive on financial size.

Suggested Citation

  • Asongu, Simplice & Nnanna, Joseph, 2020. "Financial crisis, financial globalisation and financial development in Africa," MPRA Paper 107104, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:107104
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    References listed on IDEAS

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    2. Simplice A. Asongu & Nicholas M. Odhiambo, 2019. "Challenges of Doing Business in Africa: A Systematic Review," Journal of African Business, Taylor & Francis Journals, vol. 20(2), pages 259-268, April.
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    9. Simplice A. Asongu, 2014. "Correcting Inflation with Financial Dynamic Fundamentals: Which Adjustments Matter in Africa?," Journal of African Business, Taylor & Francis Journals, vol. 15(1), pages 64-73, April.
    10. Simplice A Asongu & Lieven De Moor, 2017. "Financial Globalisation Dynamic Thresholds for Financial Development: Evidence from Africa," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(1), pages 192-212, January.
    11. Simplice Asongu, 2014. "Financial development dynamic thresholds of financial globalization," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 41(2), pages 166-195, March.
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    2. Alexandra Horobet & Irina Mnohoghitnei & Emanuela Marinela Luminita Zlatea & Lucian Belascu, 2022. "The Interplay between Digitalization, Education and Financial Development: A European Case Study," JRFM, MDPI, vol. 15(3), pages 1-23, March.

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    More about this item

    Keywords

    Banking; Financial crisis; Financial development;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F30 - International Economics - - International Finance - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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