Banking industry instability, governance and development: empirical evidence from Sub-Saharan Africa

Rexford Abaidoo and Elvis Kwame Agyapong

International Journal of Business and Emerging Markets, 2022, vol. 14, issue 4, 374-395

Abstract: This empirical study assesses the effect of instability in the banking industry and quality of governance on development in the sub-region of Sub-Saharan Africa (SSA) using data compiled from 40 countries from 1996 to 2018. Two-step system generalised method of moments (TSS-GMM) model based empirical estimates suggest that instability in the banking sector hinders development in the sub-region all things being equal. Improvement in quality of governance is however found to have positive influence on development among economies in the sub-region. Again, the results of the study suggest that governance quality lessens adverse effect of banking industry instability on development all things being equal. The importance of stability in banking industry and improved governance among economies in the sub-region is thus, affirmed by this study's empirical conclusions.

Keywords: banking industry instability; development; governance; GMM model; two-step system generalised method of moments; TSS-GMM; Africa. (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbema:v:14:y:2022:i:4:p:374-395

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