Simplice A., Asongu (2011): Globalization, financial allocation efficiency and regional economic dynamics: asymmetric panel evidence from Africa.
Download (179kB) | Preview
This paper examines how regionalization in the face of globalization has affected financial development in the context of banking system efficiency in Africa. Results which are robust to financial system efficiency and growth-led-finance nexus reveal that in the post-regionalization era: (1) UEMOA and CEMAC regional banks’ ability to finance credit by deposits has reduced; (2) financial institutions of COMESA have improved their capacity to fund openness related activities/projects with deposits; (3) increase in welfare has positively affected the intermediary role of banks; (4) globalization tends to be more detrimental to financial systems of ‘economic and monetary’ regions than to those of purely economic regions. As a policy implication, national and regional authorities should gain knowledge of the fact that with openness, the role of domestic and regional banks seems to lessen in the funding of openness related activities and projects. Much needs to be done on the improvement of infrastructure that curtails information asymmetry in the banking industry.
|Item Type:||MPRA Paper|
|Original Title:||Globalization, financial allocation efficiency and regional economic dynamics: asymmetric panel evidence from Africa|
|Keywords:||Globalization; Financial Development; Regional Integration; Panel; Africa|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O10 - General
D - Microeconomics > D6 - Welfare Economics > D60 - General
A - General Economics and Teaching > A1 - General Economics > A10 - General
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General
P - Economic Systems > P5 - Comparative Economic Systems > P50 - General
|Depositing User:||Simplice Anutechia Asongu|
|Date Deposited:||05. Oct 2011 21:42|
|Last Modified:||24. Oct 2015 04:07|
Baltagi, B.H., Demetriades, P.O., & Law, S. H.,(2009), “Financial Development and Openness: evidence from panel data”, Journal of Development Economics, 89(2), pp.285-296.
Claessens, Stijn, Demirgüç-Kunt, A, & Huizinga, H.(2001,May), “How does foreign entry affect the domestic banking market? Journal of Banking and Finance 25 , pp. 891–911.
Demirguc-Kunt, A., Beck, T., & Levine, R., (1999), “A New Database on Financial Development and Structure”, International Monetary Fund, WP 2146.
Demirguc-Kunt, A., & Beck, T., (2009, May), “Financial Institutions and Markets Across Countries over time: Data and Analysis”, World Bank Policy Research Working Paper No. 4943.
Dornbusch, R. (1992), “The Case for Trade Liberalization in the Developing countries”, Journal of Economic Perspectives, 6(1), pp.69-85.
Gries, T., Kraft, M., & Meierrieks, D., (2009), “Linkages between financial deepening, trade openness, and economic development: causality evidence from Sub-Saharan Africa”, World Development, 37(12), pp. 1849-1860.
Hanh, P. T. H., (2010), “Financial Development, Financial Openness and Trade Openness: New evidence”, CARE – EMR, University of Rouen, France.
Im, K.S., Pesaran, M.H., & Shin, Y., (2003), “Testing for unit roots in heterogeneous panels”, Journal of Econometrics", 115, pp.53-74.
Irving, J.,(2005). “Regional Integration of Stock Exchanges in Eastern and Southern Africa: Progress and Propects”. IMF Working Paper 05/ 122.
Kablan, S., (2010). “Banking Efficiency and Financial Development in Sub-Saharan Africa”, IMF Working Paper /10/136
Kaiser, H. F., (1960), “The application of electronic computers to factor analysis”, Educational and Psychological Measurement, 20, pp. 141-151.
Kandiero, T., & Chitiga, M.,(2003, October), “Trade Openness and Foreign Direct Investment in Africa”, Department of Economics, University of Pretoria.
Khim, V.S.L., (2004), “Which lag selection criteria should we employ”, Economics Bulletin, 3(33), pp.1-9.
Kim, D., Lin, S., & Suen, Y., (2010), “Dynamic effects of trade openness on financial development”, Economic Modeling, 27, pp. 254-261.
Kiyota, H., (2009, March), “Efficiency of Commercial Banks in Sub-Saharan Africa: A comparative Analysis of Domestic and Foreign Banks”, Asian Development Bank Institute.
Kumo, W., (2008). “Stock Exchange in Africa: Prospects and Challenges”. Buzzle.com < http://www.buzzle.com/articles/stock-exchange-in-africa-prospects-and-challenges.html>
Lane, P.R., & Milesi-Ferretti, G.M., (2006), “The external wealth of nations Mark II: revised and extended estimates of foreign assets and liabilities 1970–2004”, IMF Working Paper 06/69.
Levin, A., Lin, C.F., & Chu, C.S., (2002), “Unit root tests in panel data: asymptotic and finite-sample properties”, Journal of Econometrics, 108, pp. 1-24.
Maddala, G.S., & Wu, S. (1999), “A Comparative Study of Unit Root test with Panel Data and New Simple test”, Oxford Bulletin of Economics and Statistics, 61, pp. 631-652.
Mbabazi, J., Milner, C., & Morrissey, O., (2008), “Trade Openness, Trade Cost and Growth: Why Sub-Saharan Africa Performs Poorly”, Centre for Research in Economic Development and International Trade, University of Nottingham.
Okeahalam, C.C.,( 2001, March). “Strategic Alliances and Mergers of Financial Exchanges: The Case of the SADC”, Centre for the Study of African Economies: Oxford University.
Peria, M., Soledad, M, & Mody, A., (2003), “How foreign participation and market concerntration impact bank spreads: Evidence from latin America”, World Bank
Rajan, R.G., & Zingales, L., (2003), “The great reversals: the politics of financial development in the twentieth century”, Journal of Financial Economics, 69, pp.5–50.
Sathye, M.,(2003), “Efficiency of banks in the developing economy: The case of India”, European Journal of Operational Research, 148, pp. 662-671.
Spatarenu, M., & Manole, V., (2010), “Trade Openness and Income: a re-examination”, Economic Letters, 106, pp.1-3.
Staub, R. B., Souza, G., & Tabak, B.M., (2010), “Evolution of bank efficiency in Brazil: A DEA approach”, European Journal of Operational Research, 202, pp.204-213.
Wakeman-Linn, J. & Wagh, S., (2008, March). “Regional Financial Integration: Its Potential Contribution to Financial Sector Growth and Development in Sub-Saharan Africa”, Seminar on African Finance for the 21st Century at IMF Institute in Tunis.
Welch, K.H., & Wacziarg, R., (2008), “Trade Liberalization Growth: New Evidence”, World Bank Economic Review, 22(2), pp.187-231.
Yartey, C. A., & Adjasi, C. K., (2007). “Stock Market Development in Sub-Saharan Africa: Critical Issues and Challenges”, IMF Working Paper 07/209.