Linkages between Financial Deepening,Trade Openness and Economic Development: Causality Evidence from Sub-Saharan Africa
Manfred Kraft () and
Daniel Meierrieks ()
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Manfred Kraft: University of Paderborn
No 15, Working Papers CIE from Paderborn University, CIE Center for International Economics
This contribution tests for causality between financial deepening, trade openness and economic development for 16 Sub-Saharan African countries. An advanced econometric methodology is used to add to existing empirical evidence. Only limited support is found for finance promoting regional development. In particular, support for the popular hypothesis of finance-led growth is not substantial. In general, it is found that financial deepening and trade openness have swayed regional development only marginally. Thus, development strategies prioritizing financial sector or trade liberalization cannot be supported. Instead, a holistic policy approach taking into account other fundamental development factors is advocated.
Keywords: Financial Markets; Economic Growth; Openness; Hsiao’s Granger Causality; Sub- Saharan Africa (search for similar items in EconPapers)
JEL-codes: C32 O16 O55 (search for similar items in EconPapers)
Pages: 33 pages
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Journal Article: Linkages Between Financial Deepening, Trade Openness, and Economic Development: Causality Evidence from Sub-Saharan Africa (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pdn:ciepap:15
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