Does Financial Constraints Impede Growth Convergence? Evidence From ECOWAS

Chukwuemeka Onyimadu

MPRA Paper from University Library of Munich, Germany

Abstract: The paper examines the hypothesis that financial constraints can impede convergence in growth rates. Using a Schumperetian growth model that incorporates innovations and financial constraints, the paper was able to put forward plausible effects of financial constraints on growth convergence in ECOWAS member countries. Employing a panel regression, the paper found that financial constraints which are present in countries with a less developed financial sector can impede growth convergence. This finding is robust when policy control variables – government size, inflation, trade openness - were included in the model.

Keywords: Growth; Conditional Convergence; Financial Development; Innovations (search for similar items in EconPapers)
JEL-codes: E6 O4 (search for similar items in EconPapers)
Date: 2015
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Published in Journal of Research in Management and Social Sciences 1.1(2015): pp. 134-152

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:77205

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