Record Details

Financial Intermediaries Versus Financial Markets: A South African Experience

International Business & Economics Research Journal

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Field Value
 
Title Financial Intermediaries Versus Financial Markets: A South African Experience
 
Creator Odhiambo, Nicholas M.
 
Subject Economics
Financial Intermediaries; Financial Markets; Economic Growth; Causality
 
Description In this paper, a dynamic causal relationship between stock market development, bank-based financial development and economic growth in South Africa is examined during the period 1980:1-2007:3, using a trivariate Granger causality model. The study attempts to answer two critical questions. Does financial sector development Granger cause economic growth? Which sector leads in the process of financial development in South Africa – bank-based sector or stock market sector? Using a cointegration-based error-correction mechanism, the empirical results reveal that there is a distinct unidirectional causal flow from stock market development to bank development. The results also indicate that there is a bi-directional causal relationship between stock market development and economic growth.  Similar results were also found on the causality between bank-based financial development and economic growth. The study, therefore, concludes that whilst both financial development and economic growth Granger cause each other, the development of the financial sector in South Africa is largely driven by the stock market activities.
 
Publisher The Clute Institute
 
Date 2011-01-27
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://www.cluteinstitute.com/ojs/index.php/IBER/article/view/1795
10.19030/iber.v10i2.1795
 
Source International Business & Economics Research Journal (IBER); Vol 10 No 2 (2011)
2157-9393
1535-0754
10.19030/iber.v10i2
 
Language eng
 
Relation https://www.cluteinstitute.com/ojs/index.php/IBER/article/view/1795/1775