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Financial development and total factors productivity channel: Evidence from Africa

Indonesian Capital Market Review

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Title Financial development and total factors productivity channel: Evidence from Africa
 
Creator Elhadj EZZAHID; Faculty of Law and Economics, Mohammed V University Rabat
Zakaria ELOUAOURTI; Department of Economics, Laboratory of Applied Economics
 
Subject Total Factors Productivity; financial development; financial composite index; economic growth
 
Description We discuss the link between financial development and economic growth through Total Factor Productivity (TFP) canal in African economies. First, we use a composite index to hierarchize financial development in 40 African countries. Then, we study this relationship by using the methodology of panel data based on the Breusch-Pagan LM Test and Hausman Test, to determine the nature of the specific effect, in a panel of 22 economies. The main results of our study show that the development of the financial sector does not promote total factors productivity in low-income and upper-middle-income countries. For the lower middle-income countries, the Finance-TFP relation- ship is significantly positive. The reforms of African financial systems should be designed and directed to increase the adequacy of financial services with the needs of each economy.
 
Publisher Management Research Center, Department of Management, Faculty of Economics and Business, U
 
Contributor —
 
Date 2019-04-04
 
Type —
 
Format application/pdf
 
Identifier http://journal.ui.ac.id/index.php/icmr/article/view/10827
 
Source Indonesian Capital Market Review; Vol 10, No 2 (2018): July 2018
 
Language en