Financial Development and Economic Growth: Evidence from Low-Income Nations in the SADC Region

Courage Mlambo ()
Additional contact information
Courage Mlambo: Faculty of Commerce, Independent Institute of Education, Johannesburg 1724, South Africa

IJFS, 2024, vol. 12, issue 3, 1-16

Abstract: The study sought to examine the relationship between financial development and economic growth in low-income nations in the SADC region. Motivated by the observation that numerous states in the SADC region lack adequately developed financial systems, this investigation was undertaken. Many SADC states are low-income countries, and they remain financially underdeveloped, which could compromise their growth prospects. The analysis was quantitative in nature, and used panel data to achieve its objectives. The data period spanned from 2000 to 2022. The dynamic common correlated effects (DCCE) technique was used for estimation purposes. Results showed that there is a positive relationship between financial development and economic growth. The relationship was also found to be causal: financial development is not only a result of economic growth; it also influences growth. The evidence from the findings supports the notion that financial development is needed to increase the effectiveness of resource allocation and consequently promote growth. This calls on the governments in the countries under investigation to create environments that foster financial development.

Keywords: financial development; economic growth; financial system; finance-induced turmoil; capital accumulation; low-income countries (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2227-7072/12/3/62/pdf (application/pdf)
https://www.mdpi.com/2227-7072/12/3/62/ (text/html)

Related works:
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:gam:jijfss:v:12:y:2024:i:3:p:62-:d:1423715

Access Statistics for this article

IJFS is currently edited by Ms. Hannah Lu

More articles in IJFS from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().