IDEAS home Printed from https://ideas.repec.org/a/taf/oaefxx/v9y2021i1p1934976.html
   My bibliography  Save this article

Financial development and economic growth in sub-Saharan Africa: A sectoral perspective

Author

Listed:
  • Yazidu Ustarz
  • Ashenafi Beyene Fanta
  • Wai Ching Poon

Abstract

Research on the impact of financial development on economic growth remains inconclusive. Previous empirical examination of the link is based on aggregate GDP on the presumption that each economic sector responds identically to financial development. However, the extent of credit utilisation, as well as productivity of credit, may not necessarily remain the same across sectors. This study therefore seeks to contribute to the literature by examining the effect of financial development across sectors in sub-Saharan Africa using the Generalised Method of Moments (GMM) over the period 1990–2018. Indeed, the findings show that while financial development has a positive effect on the service and agricultural sectors, a certain threshold of financial development must be reached before it can positively contribute to the growth of the industrial sector. The findings are robust to a different estimation technique. With the industrial sector considered critical for economic transformation, our findings imply that policymakers in sub-Saharan Africa need to continue to promote financial development to spur industrialization.

Suggested Citation

  • Yazidu Ustarz & Ashenafi Beyene Fanta & Wai Ching Poon, 2021. "Financial development and economic growth in sub-Saharan Africa: A sectoral perspective," Cogent Economics & Finance, Taylor & Francis Journals, vol. 9(1), pages 1934976-193, January.
    • Handle: RePEc:taf:oaefxx:v:9:y:2021:i:1:p:1934976
    DOI: 10.1080/23322039.2021.1934976
    as

    Download full text from publisher

    File URL: https://hdl.handle.net/10.1080/23322039.2021.1934976
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/23322039.2021.1934976?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Oliver Asiamah & Samuel Kwaku Agyei, 2023. "Information sharing offices and economic growth in sub‐Saharan Africa," African Development Review, African Development Bank, vol. 35(2), pages 211-225, June.
    2. Sadia Yasmin & Mohammad Ayaz & Muhammad Ather Ashraf, 2022. "Accelerating Industrial Output Growth through Islamic Bank Decomposed Financing Optimization in Malaysia," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(4), pages 544-560, December.
    3. Prempeh Kwadwo Boateng & Frimpong Joseph Magnus, 2024. "Financial Development-International Trade Nexus in Ghana: The Role of Sectoral Effects," Zagreb International Review of Economics and Business, Sciendo, vol. 27(1), pages 7-30.
    4. Bakari, Sayef, 2024. "Unlocking Prosperity: Fresh Insights into Economic Growth Through Financial Development, Domestic Investment, and Corruption Trends in LAC Countries," MPRA Paper 120411, University Library of Munich, Germany.
    5. Michael S. Akpan & Marvelous Aigbedion & Joshua Jeremiah Dandaura & Irimiya Christabel Musa, 2024. "Impact of Financial Sector Development, Trade and Economic Growth in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(8), pages 1880-1894, August.
    6. Ikhsan Ikhsan & Khairul Amri, 2023. "Sectoral Growth Impacts of Bank Credit Allocation: The Role of COVID-19 Pandemic as Moderating Variable," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 32-50.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:oaefxx:v:9:y:2021:i:1:p:1934976. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: https://www.tandfonline.com/OAEF20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.