Financial Liberalisation, Political Stability, and Economic Determinants of Real Economic Growth in Kenya

Zakaria Yakubu, Nanthakumar Loganathan, Tirta Mursitama, Abbas Mardani, Syed Abdul Rehman Khan and Asan Ali Golam Hassan
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Zakaria Yakubu: Department of Economics, Kaduna State College of Education Gidan Waya, Kafanchan PMB 1024, Kaduna State, Nigeria
Syed Abdul Rehman Khan: School of Economics and Management, Tsinghua University, Beijing 100080, China
Asan Ali Golam Hassan: Azman Hashim International Business School, Universiti Teknologi Malaysia, Kuala Lumpur 54100, Malaysia

Energies, 2020, vol. 13, issue 13, 1-16

Abstract: This study aimed to analyse financial liberalisation, political stability, and economic determinants of Kenya’s real economic growth using time series data over the period of 1970–2016. The authors specified quadratic and interactive models to be estimated by employing a quantile regression analysis. The traditional and quantile unit root test was used in testing the stationarity issue. The co-integration findings indicated that the capital account openness and financial development impede on real economic growth; and the political stability also had potential influence on the real economic growth of Kenya. Interestingly, there is a nonlinear U-shape link between financial development and real economic growth that undermined the real economic growth at its onset, but as it advanced, it enhanced the growth of the country in the long run. The policymakers should ensure that the capital account is more liberalised so that it will continue to stimulate the financial development. In the same way, the liberalisation of the domestic financial market should be taken in earnest to overcome the negative effects of financial repression in totality, while maintaining the stable political atmosphere.

Keywords: financial liberalisation; real economic growth; resource policy; trade openness; political stability policy; quantile estimates (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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