Financial development, bank savings mobilization and economic performance in Ghana: evidence from a multivariate structural VAR

Deodat Adenutsi

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the implications of financial development for commercial bank savings mobilisation and economic performance in Ghana since the pursuit of financial reforms programme in September 1987. To achieve this objective a Structural Vector Autoregressive (SVAR) model on quarterly time series data spanning from 1987(3) to 2009(4) was employed. The methodological approach of the analysis hinged on the verification of the theoretical stance that financial development promotes improved financial intermediation, efficient resource mobilisation and allocation for higher economic performance. The empirical results suggest that, in Ghana, financial development has enhanced the performance of commercial banks by way of savings mobilisation but adversely impacted on long-run economic performance directly. Thus, financial development can only enhance long-run economic performance indirectly through increased savings mobilised by banks. The success of Ghana’s financial reform programme is largely contingent on the depth of the financial market, which should be considered as the starting point in the sequencing of policy implementation. It is concluded that prudent and rigorous policy measures that will further enhance financial deepening are critically required and this should be seen by policymakers in Ghana as the necessary condition for resource mobilisation and long-run economic performance.

Keywords: Financial Development; Bank Savings Mobilisation; Economic Performance; SVAR Model (search for similar items in EconPapers)
JEL-codes: C3 E5 G2 O16 O4 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in International Journal of Development Research and Quantitative Techniques 2.1(2011): pp. 3-24

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/29571/1/MPRA_paper_29571.pdf original version (application/pdf)

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:pra:mprapa:29571

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().