Liberalisation and Financial Sector Competition: A Critical Contribution to the Empirics with an African Assessment

Simplice Asongu

South African Journal of Economics, 2015, vol. 83, issue 3, 425-451

Abstract: This paper investigates how financial, trade, institutional and political liberalisation policies have affected financial sector competition in Africa using updated data to appraise second-generation reforms. The “freedom to trade” and “economic freedom” indices are employed. Hitherto, unexplored financial sector concepts of formalisation, semi-formalisation, informalisation and non-formalisation are also introduced. The following findings are established. First, relative to money supply, (i) with the exception of the economic freedom mechanism, liberalisation policies have generally decreased the growth of the formal financial sector to the benefit of other financial sectors; (ii) apart from the foreign direct investment and economic freedom channels, liberalisation policies have been fruitful for semi-formal financial development at the cost of other financial sectors and; (iii) with the exception of economic freedom, both the informal and non-formal sectors have developed owing to liberalisation to the detriment of the formal financial sector. Second, relative to gross domestic product, the semi-formal, informal and/or non-formal financial sectors have also generally improved as a result of liberalisation. Policy implications are discussed.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (90)

Downloads: (external link)
http://hdl.handle.net/10.1111/saje.12048 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Liberalization and financial sector competition: a critical contribution to the empirics with an African assessment (2013)
Working Paper: Liberalization and financial sector competition: a critical contribution to the empirics with an African assessment (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:sajeco:v:83:y:2015:i:3:p:425-451

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0038-2280

Access Statistics for this article

South African Journal of Economics is currently edited by Philip A. Black

More articles in South African Journal of Economics from Economic Society of South Africa Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().