African financial development dynamics: big time convergence

Simplice Asongu

African Journal of Economic and Management Studies, 2014, vol. 5, issue 2, 160-194

Abstract: Purpose - – Assessment of African financial development dynamic convergences in money, credit, efficiency and size. The paper aims to discuss these issues. Design/methodology/approach - – The empirical evidence is premised on 11 homogenous panels based on regions (Sub-Saharan and North Africa), income-levels (low, middle, lower-middle and upper-middle), legal-origins (English common-law and French civil-law) and religious dominations (Christianity and Islam). The paper examines convergence in financial intermediary dynamics of depth, efficiency, activity and size. Findings - – Findings suggest that countries with small-sized financial intermediary depth, efficiency, activity and size are catching-up countries with large-sized financial intermediary depth, efficiency, activity and size, respectively. The paper also provide the speeds of convergence and time necessary to achieve a full (100 percent) convergence. Practical implications - – The presence of strong links among African banking sectors may present little opportunity for portfolio diversification. The convergence patterns show positive steps toward regional integration. As a policy implication, African governments should not relent in structural and institutional reforms. Originality/value - – It is the first critical assessment of convergence in financial intermediary development dynamics in the African continent.

Keywords: Africa; Banking; Convergence; Policy coordination (search for similar items in EconPapers)
Date: 2014
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Related works:
Working Paper: African Financial Development Dynamics: Big Time Convergence (2012)
Working Paper: African Financial Development Dynamics: Big Time Convergence (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ajemsp:v:5:y:2014:i:2:p:160-194

DOI: 10.1108/AJEMS-06-2012-0037

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