Is there a role for governance in the saving-investment nexus for Sub-Saharan Africa?
Ibrahim Raheem (),
Kazeem Ajide () and
Oluwatosin Adeniyi ()
Journal of Social and Economic Development, 2015, vol. 17, issue 2, 120-134
The study broke some yet to be explored ground in the literature on the Feldstein-Horioka (FH) puzzle. Precisely, it uncovered the role of institutions (particularly governance) in the saving-investment causal nexus using data on a panel of 37 sub-Saharan Africa countries, over the period spanning 1996 through 2010. Deploying a battery of panel estimators, the findings further lend support to earlier opinions on the bound of ranges of saving retention coefficients for the region. More specifically, the coefficients are −0.014, 0.200 and 0.21 in the ordinary least squares (OLS), fixed effects (FE) and random effects (RE) regressions, respectively. These estimates are largely synonymous to those reported for SSA in extant studies. Interestingly, considerable improvement was recorded in the saving coefficient from 0.20 to 0.361 when governance was interacted with saving. This concretely reinforces the useful role of governance in mobilizing saving for investment within these economies. Based on these findings, domestic resource mobilisation can be a veritable vehicle for plugging the substantial investment gap in these SSA economies. However, such policy thrust must be necessarily complemented by far-reaching governance reforms. Copyright Institute for Social and Economic Change 2015
Keywords: Feldstein–Horioka coefficients; Governance indicators; Panel regression; Sub-Saharan Africa; C23; D73; F12; H5 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:jsecdv:v:17:y:2015:i:2:p:120-134
Ordering information: This journal article can be ordered from
Access Statistics for this article
Journal of Social and Economic Development is currently edited by M.G. Chandrakanth, D. Rajasekhar, Anand Inbanathan and S. Madheswaran
More articles in Journal of Social and Economic Development from Springer, Institute for Social and Economic Change
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().