Foreign bank presence and inclusive growth in Africa: the moderating role of financial development

Khadijah Iddrisu, Joshua Yindenaba Abor and Thadious Kannyiri Banyen

African Journal of Economic and Management Studies, 2023, vol. 15, issue 3, 349-365

Abstract: Purpose - The purpose of this study is to assess the extent to which the nexus between foreign bank presence (FBP) and inclusive growth is being impacted by the financial development. Design/methodology/approach - The study used a two-stage system generalized method of moment (GMM), using 28 African countries from the period 2000 to 2018. Findings - The study found a positive effect of FBP on inclusive growth. While financial development magnifies the positive effect of FBP, inclusive growth nexus, it has a direct effect on inclusive growth. Practical implications - For Africa to ascertain the positive effect of FBP on inclusive growth, financial system must be developed to reduce the cream-skim behavior of foreign banks. Originality/value - This paper assess the extent to which developing economy's developed financial system form synergies with FBP to further enhance the inclusiveness of growth.

Keywords: Foreign banks presence; Inclusive growth; Financial development; GMM (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ajemsp:ajems-11-2022-0444

DOI: 10.1108/AJEMS-11-2022-0444

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