Finance-growth nexus in sub-Saharan Africa
South African Journal of Economic and Management Sciences
Field | Value | |
Title | Finance-growth nexus in sub-Saharan Africa | |
Creator | Machado, Celsa M.D.C. Saraiva, António F.M.G. Vieira, Paulo D.D. | |
Description | Background: There is now significant empirical literature suggesting that finance is good for growth only up to a threshold level of financial development, becoming harmful after that level, in developed and developing countries.Aim: This study extends this literature that investigates non-linearities on the finance-growth link, by testing the inverted U-shape hypothesis in sub-Saharan African countries, which are among the least developed ones.Setting: 36 countries from sub-Saharan Africa over the period 1980–2015.Method: Estimation of quadratic dynamic panel data models by system-generalised method of moments.Results: Empirical results show that there is a hump-shaped relationship between financial development and economic growth in sub-Saharan African countries.Conclusion: Results suggest that the hypothesis of ‘too much finance harms economic growth’ also holds for low-income and less developed countries, but for much lower threshold levels of financial development than those of more developed and higher-income countries. As for policy implications, measures to strengthen finance quality and other growth-enhancing strategies need to be undertaken, rather than increasing finance size. | |
Publisher | AOSIS Publishing | |
Date | 2021-02-19 | |
Identifier | 10.4102/sajems.v24i1.3435 | |
Source | South African Journal of Economic and Management Sciences; Vol 24, No 1 (2021); 11 pages 2222-3436 1015-8812 | |
Language | eng | |
Relation |
The following web links (URLs) may trigger a file download or direct you to an alternative webpage to gain access to a publication file format of the published article:
https://sajems.org/index.php/sajems/article/view/3435/2304
https://sajems.org/index.php/sajems/article/view/3435/2303
https://sajems.org/index.php/sajems/article/view/3435/2305
https://sajems.org/index.php/sajems/article/view/3435/2302
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