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African Financial Development Dynamics: Big Time Convergence

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  • Simplice A, Asongu

Abstract

In the first critical assessment of convergence in financial development dynamics in Africa, we find overwhelming support for integration. The empirical evidence is premised on 11 homogenous panels based on regions(Sub-Saharan and North Africa), income-levels(low, middle, lower-middle and upper-middle), legal-origins(English common-law and French civil-law) and religious dominations(Christianity and Islam). We examine convergence in financial intermediary dynamics of depth, efficiency, activity and size. Findings suggest that countries with small-sized financial intermediary depth, efficiency, activity and size are catching-up with countries with large-sized financial intermediary depth, efficiency, activity and size respectively. We also provide the speeds of convergence and time necessary to achieve a full(100%) convergence. As a policy implication African governments should not relent in structural and institutional reforms.

Suggested Citation

  • Simplice A, Asongu, 2012. "African Financial Development Dynamics: Big Time Convergence," MPRA Paper 36053, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:36053
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    More about this item

    Keywords

    Convergence; Policy Coordination; Banking; Africa;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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