Financial development and economic growth: literature survey and empirical evidence from sub-Saharan African countries | Zendy

Songül Kakıllı Acaravcı | Zendy; İlhan Öztürk | Zendy; Ali Acaravcı | Zendy

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Financial development and economic growth: literature survey and empirical evidence from sub-Saharan African countries

Author(s) -

Songül Kakıllı Acaravcı,

İlhan Öztürk,

Ali Acaravcı

Publication year - 2011

Publication title -

south african journal of economic and management sciences

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.277

H-Index - 17

eISSN - 2222-3436

pISSN - 1015-8812

DOI - 10.4102/sajems.v12i1.258

Subject(s) - nexus (standard) , causality (physics) , economics , per capita , panel data , estimation , financial sector development , empirical evidence , macroeconomics , development economics , developing country , economic growth , econometrics , population , philosophy , physics , demography , management , epistemology , quantum mechanics , sociology , computer science , embedded system

In this paper we review the literature on the finance-growth nexus and investigate the causality between financial development and economic growth in Sub-Saharan Africa for the period 1975-2005. Using panel co-integration and panel GMM estimation for causality, the results of the panel co-integration analysis provide evidence of no long-run relationship between financial development and economic growth. The empirical findings in the paper show a bi-directional causal relationship between the growth of real GDP per capita and the domestic credit provided by the banking sector for the panels of 24 Sub-Saharan African countries. The findings imply that African countries can accelerate their economic growth by improving their financial systems and vice versa

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