Does financial sector development promote economic globalization in Africa?

Samuel Tawiah Baidoo, Daniel Sakyi () and Emmanuel Buabeng

Review of Economics and Political Science, 2024, vol. 10, issue 1, 69-86

Abstract: Purpose - This paper investigates whether financial sector development promotes economic globalization (EG) using data from 45 African countries. Design/methodology/approach - Using panel data of the selected African countries, the two-step system generalized method of moments estimation technique which is capable of solving any possible endogeneity problem is employed for the empirical analysis. Findings - The main finding is that all measures of financial sector development have a significant positive impact on EG in Africa. The results suggest that improving the financial sector development in a holistic manner is key in fostering EG in Africa. Originality/value - This present paper uses broader measures of EG and financial sector development. Using broader measures of these variables widens the policy scope in terms of policy adoption and implementation.

Keywords: Economic globalization; Trade globalization; Financial globalization; Financial sector development; Africa (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:repspp:reps-08-2023-0089

DOI: 10.1108/REPS-08-2023-0089

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