Financial Globalisation Dynamic Thresholds for Financial Development: Evidence from Africa

Simplice Asongu and Lieven De Moor
Additional contact information
Lieven De Moor: Vrije Universiteit Brussel

The European Journal of Development Research, 2017, vol. 29, issue 1, No 12, 192-212

Abstract: Abstract We investigate whether financial development benefits from financial globalisation are questionable until certain thresholds of financial globalisation are attained. The empirical evidence is based on (i) data from 53 African countries for the period 2000–2011 and (ii) interactive Generalised Method of Moments with forward orthogonal deviations. The following findings are established. First, thresholds of Net Foreign Direct Investment Inflows as a percentage of GDP (FDIgdp) from which financial globalisation increases money supply are 20.50 and 16.00 for below- and above-median sub-samples of financial globalisation, respectively. Second, FDIgdp thresholds from which financial globalisation increases banking system activity and financial system activity for below-median sub-samples of financial globalisation are 13.81 and 13.29, respectively. Third, for financial size, there is evidence of: (i) a positive threshold of 21.30 in the full sample and (ii) consistent increasing returns without a modifying threshold for the above-median sub-sample. Policy implications are discussed.

Keywords: banking; international investment; financial integration; development (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (527)

Downloads: (external link)
http://link.springer.com/10.1057/ejdr.2016.10 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Financial globalisation dynamic thresholds for financial development: evidence from Africa (2015)
Working Paper: Financial globalisation dynamic thresholds for financial development: evidence from Africa (2015)
Working Paper: Financial globalisation dynamic thresholds for financial development: evidence from Africa (2015)
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:pal:eurjdr:v:29:y:2017:i:1:d:10.1057_ejdr.2016.10

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/41287/PS2

DOI: 10.1057/ejdr.2016.10

Access Statistics for this article

The European Journal of Development Research is currently edited by Spencer Henson and Natalia Lorenzoni

More articles in The European Journal of Development Research from Palgrave Macmillan, European Association of Development Research and Training Institutes (EADI) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla (sonal.shukla@springer.com) and Springer Nature Abstracting and Indexing (indexing@springernature.com).