Banking sector intermediation and economic growth: new evidence from CEMAC countries

Pierre Axel Louembé, Man Wang and Dilesha Nawadali Rathnayake

Afro-Asian Journal of Finance and Accounting, 2023, vol. 13, issue 1, 22-40

Abstract: An abundant body of literature explores the impact of finance on economic growth. However, only a few studies examine this link for developing economies. This paper investigates the banking intermediation-growth nexus with respect to the Central African Economic and Monetary Community (CEMAC). Making use of two panel estimation techniques, we exert the positive influence of banking sector intermediation on long-run growth over the studied period (1990-2016). Despite finding a negative association between financial development proxies and growth, our results suggest that the banking system in CEMAC still performs its main function of pooling and allocating financial resources. The latter is evidenced by the positive association between credit proxies (domestic credit to the private sector and bank credit to bank deposits) and growth/fixed capital formation.

Keywords: financial intermediation; financial development; banking sector; CEMAC; economic growth; panel estimation. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ids:afasfa:v:13:y:2023:i:1:p:22-40

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