n South African Journal of Economic and Management Sciences - Financial development and economic growth : literature survey and empirical evidence from sub-Saharan African countries : economics
|Article Title||Financial development and economic growth : literature survey and empirical evidence from sub-Saharan African countries : economics|
|© Publisher:||University of Pretoria|
|Journal||South African Journal of Economic and Management Sciences|
|Author||Songul Kakilli Acaravci, Ilhan Ozturk and Ali Acaravci|
|Publication Date||Mar 2009|
|Pages||11 - 27|
|Keyword(s)||C33, Financial development, Growth, O11, O16, O55, Panel causality and Sub-Saharan Africa|
ISI Social Science
In this paper we review the literature on the finance-growth nexus and investigate the causality between financial development and economic growth in sub-Saharan Africa for the period 1975-2005. Using panel co-integration and panel GMM estimation for causality, the results of the panel co-integration analysis provide evidence of no long-run relationship between financial development and economic growth. The empirical findings in the paper show a bi-directional causal relationship between the growth of real GDP per capita and the domestic credit provided by the banking sector for the panels of 24 sub-Saharan African countries. The findings imply that African countries can accelerate their economic growth by improving their financial systems and vice versa.
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