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The Non-Bank Financial Intermediaries and Economic Growth in Tanzania: An Empirical Analysis 1967–2011

Tanzania Economic Review

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Title The Non-Bank Financial Intermediaries and Economic Growth in Tanzania: An Empirical Analysis 1967–2011
 
Creator Chuku, Edna D; University of Dar es salaam
Ndanshau, Michael O.A
 
Description This study examines the impact of development of Non-Bank Financial Intermediaries (NBFIs) on economic growth in Tanzania using time series data for the period 1967– 2011. It employs Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration and error correction method to investigate the existence of long-run and short-run dynamics in the relationship between NBFIs and economic growth in Tanzania. Stationarity property of the series was tested by using Phillips-Perron (PP) and Zivot-Andrews methods. Results from the study confirmed the existence of a stable long-run relationship between economic growth, the NBFIs and other determinants— investment, inflation, interest rate, and trade openness. Notable, however, the study found that the development of NBFIs, as measured by lending to the government, exerted a significant positive effect on economic growth in the short-run but not in the long-run. CUSUM and CUSUMQ test results revealed a lack of evidence of any significant structural instability among variables used in the study. The results suggest that it is important to have appropriate policies aimed at developing the non-banks financial sector to foster economic growth over the long-run period. Key words: non-banks, economic growth, cointegration, error correction model, ARDL method, Tanzania.       JEL Classification:     E2, E4, E5.  
 
Publisher Dar es Salaam University Press
 
Contributor —
 
Date 2017-10-24
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://journals.udsm.ac.tz/index.php/ter/article/view/1050
 
Source Tanzania Economic Review; Vol 6, No 1 (2016): TER
2507-7740
0856-3373
 
Language eng
 
Relation https://journals.udsm.ac.tz/index.php/ter/article/view/1050/976
 
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