Vérification empirique du lien finance-croissance économique : approche non linéaire appliquée aux pays de la cedeao

Dioum, Sokhna Bousso (2021): Vérification empirique du lien finance-croissance économique : approche non linéaire appliquée aux pays de la cedeao.

Abstract

In this article, a non-linear approach is used to examine the effects of developing financial structures on the economic growth of West African states. To do this, we use the MMG-system to estimate quadratic models such as those proposed by Gambarta et al. (2014) for dynamic panels. Over the period [1998-2017], we show on the one hand that the marginal effect of the banking industry on economic growth increases initially, reaches a maximum and then gradually decreases. This demonstrates a non-linear relationship between increased banking activities and economic growth within the community, and confirms the findings of Hou and Cheng (2017) with low-income countries. On the other hand, a widening of capital markets positively affects the economic growth of West African countries. Overall, our study shows that the main contribution to weakening growth comes from increased banking activities and not from greater investor access to markets. To ensure stable growth, the West African authorities should focus on supporting expanding markets, strengthening liquidity and moderately controlling banking activities. Also, governments should encourage the writing of scientific articles.

• Item Type: MPRA Paper
• English Title: Empirical verification of the finance-economic growth link: non-linear approach applied to ecowas countries
• Language: French
• Keywords: Economic growth, financial development, banking sector, financial market, production of scientific articles.
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O30 - General; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General

References

Agbélénko, F. A., & Kibet, K. S. (2015). Financial developpment and economic growth in west african economic and monetary union (waemu). African Journal of Business Management, 9(17), 624-632.

Agbetsiafa, D., (2004). The finance growth nexus: evidence from Subsaharan Africa. Savings and Development 38, 271-288

Aizenman, J., Jinjarak, Y., & Park, D. (2015). Financial development and output growth in developing asia and latin america: a comparative sectoral analysis. National Bureau of Economic Research, No. wp No 20917.

Akinlo, A. E., & Egbetunde, T. (2010). Financial development and economic growth: the experience of 10 subsaharan African countries revisited. The Review of Finance and Banking, 2(1).

Anota, M. (2015). Pourquoi la croissance de l'investissement a-t-elle ralenti dans les pays émergents ?

Bagehot, W. (1873). Lombard Street: a description of the money market. Scribner, Armstrong & Company.

Barra, C., & Ruggiero, N. (2020). The role of nonlinearity on the financial development–economic performance nexus: an econometric application to Italian banks. Empirical Economics, 1-30.

Beck T. et Levine R. (2004). Stock markets, banks and growth: panel evidence. Journal of banking and finance, Vol.28, 423-442

Beck T., Demirgüç-Kunt A. et Levine R. (2004). Finance, inegality and poverty: cross- country Evidence, World Bank Policy Research, working paper N°3338.

Bekaert, G., Harvey, C. R., & Lundblad, C. (2005). Does financial liberalization spur growth ? Journal of Financial Economics, 77(1), 3-55.

Ben Naceur S. et Ghazouani S. (2007). Stock markets, banks and economic growth : empirical evidence from the mena region. Research in International Business and Finance, Vol.21, n°2, 297-315.

Bertay, A. C., & Uras, B. (2016). Leverage, bank employee compensation and Institutions.

Blundell, R. et Bond, S. (1998).Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, vol. 87, n°1, 115–143.

Boyd, J. H., & Prescott, E. C. (1986). Financial intermediary-coalitions. Journal of Economic Theory, 38(2), 211-232.

Cecchetti S. G. et Kharroubi E. (2012). Reassessing the impact of finance on growth”, BRI, working paper, n° 381.

Demirgüç-Kunt, A., & Maksimovic, V. (1998). Law, finance, and firm growth. Journal of Finance, 53(6).

Diop, T. (2013). Développement financier et croissance économique: la structure financière joue-t-elle un rôle ?

Eggoh, J. C. (2011). Récents développements de la littérature sur la finance et la croissance économique. Mondes en Développement, (3), 141-150.

Fontaçné, L., & Guérin, J. L. (1997). Ouverture, catalyseur de la croissance.

Gambacorta, L., Yang, J., & Tsatsaronis, K. (2014). Financial structure and growth.

Gapi, B. (2015). Membangun kepercayaan diri Siswa Melalui kegiatan ekstrakurikuler. Fakultas Ekonomi UNY, 430-442.

Ghirmay, T. (2004). Financial development and economic growth in subsaharan African countries: evidence from time series analysis. African Development Review, 16(3), 415-432.

Goldsmith R. (1969). Financial structure and development. Yale University Press.

Greenwood, J., & Jovanovic, B. (1990). Financial development, growth, and the distribution of income. Journal of Political Economy, 98(5, Part 1), 1076-1107.

Hou, H., & Cheng, S. Y. (2017). The dynamic effects of banking, life insurance, and stock markets on economic growth. Japan and the World Economy, 41, 87-98.

Kassi, D. F., Li, Y., & Dong, Z. (2019). The mitigating effect of governance quality on the finance‐renewable energy‐growth nexus: some international evidence. International Journal of Finance & Economics.

King R. et Levine R. (1993a). Finance and Growth: Schumpeter Might Be Right ? The Quarterly Journal of Economics, vol.108, 717-738

Kpodar, K. (2005). Manuel d’initiation à Stata (Version 8). Centre d’Études et de Recherches sur le Développement international (CERDI), Centre National de la Recherche scientifique (CNRS).

Law, S. H., & Singh, N. (2014). Does too much finance harm economic growth ? Journal of Banking & Finance, 41, 36-44.

Levin, A., Lin, C. F., & Chu, C. S. J. (2002). Unit root tests in panel data: asymptotic and finite-sample properties. Journal of Econometrics, 108(1), 1-24.

Levin, A., Lin, C.-F., James Chu, C.-S. Unit root tests in panel data: asymptotic and finite-sample properties. Journal of Econometrics, n° 108, 2002, pp. 1-24.

Levine R., Loayza N. et Beck T. (2000). Financial intermediation and growth: causality and causes”, Journal of Monetary Economics, vol. 46, n° 1, 31-77.

Levine, R. (2005). Finance and growth: theory and evidence. Handbook of Economic Growth, 1, 865-934.

Levine, R., & Zervos, S. (1998). Stock markets, banks, and economic growth. American Economic Review, 537-558. Lucas Jr, R. E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(1), 3-42.

McKinnon R. (1973). Money and Capital in Economic Development. The Brooking Institution.

Merton, R. C., & Bodie, Z. (1995). A conceptual framework for analyzing the financial system. The Global Financial System, 3-31.

Naceur, S. B., Barajas, A., & Massara, A. (2017). Can islamic banking increase financial inclusion ? Edward Elgar Publishing.

Onisi, M., Shimura, N., Nakamura, C., & Sato, M. (1981). A field test on the caries preventive effect of tea drinking. Journal of Dental Health, 31(1), 13-19.

Phiri, A. (2010). At what level is inflation least detrimental towards finance-growth activity in South Africa? Journal of Sustainable Development in Africa, 12(6), 354-364.

Raheem, I. D., & Oyinlola, M. A. (2015). Financial development, inflation and growth in selected west african countries. International Journal of Sustainable Economy, 7(2), 91-99.

Rajan, R., & Zingales, L. (1998). Financial development and growth. American Economic Review, 88(3), 559-586.

Rakshit, B., & Bardhan, S. (2019). Does bank competition promote economic growth? Empirical evidence from selected South Asian countries. South Asian Journal of Business Studies.

Robinson, J. (1952). The model of an expanding economy. The Economic Journal, 62(245), 42-53.

Sahay, R., Čihák, M., N'Diaye, P., & Barajas, A. (2015). Rethinking financial deepening: stability and growth in emerging markets. Revista dé Economía Institucional, 17(33), 73-107.

Sène B. et Thiam I. (2018). La relation entre finance et croissance revisitée dans les pays de l’afrique subsaharienne: banques versus marchés financiers. L'Actualité Economique, N°94, 91-119

Shaw E. S. (1973). Financial deepening in economic development. Oxford University Press, New York

Shen, C. H., & Lee, C. C. (2006). Same financial development yet different economic growth: why? Journal of Money, Credit and Banking, 1907-1944.

Shumpeter J. (1912). The Theory of economic development, leipzig: dunker & humblot, traduit par redvers Opie, cambridge, ma. Harvard University Press, 1934

Soedarmono, W., & Tarazi, A. (2016). Competition, financial intermediation, and riskiness of banks: evidence from the asia-pacific region. Emerging Markets Finance and Trade, 52(4), 961-974.

Zahonogo, P. (2017). Trade and economic growth in developing countries: evidence from sub-saharan Africa. Journal of African Trade, 3(1-2), 41-56.