Financial development, trade openness and economic growth in African countries: New insights from a panel causality approach

Kojo Menyah, Saban Nazlioglu and Yemane Wolde-Rufael

Economic Modelling, 2014, vol. 37, issue C, 386-394

Abstract: This paper examines the causal relationship between financial development and economic growth for 21 African countries within a framework which also accounts for international trade. We develop a financial development index based on four different financial development indicators and apply the panel bootstrapped approach to Granger causality. The empirical results show limited support for the finance-led growth and the trade-led growth hypotheses. The results imply that recent attempts at financial development and trade liberalization do not seem to have made a significant impact on growth.

Keywords: Financial development; Trade openness; Economic growth; Africa; Panel causality (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (199)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:37:y:2014:i:c:p:386-394

DOI: 10.1016/j.econmod.2013.11.044

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