Combined Effects of Institutional Quality and Financial Development on Macroeconomic Performance in Sub-Saharan African Countries
top of page
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Economics and Business

Quarterly Reviews

ISSN 2775-9237 (Online)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
crossref
doi
open access

Published: 07 September 2020

Combined Effects of Institutional Quality and Financial Development on Macroeconomic Performance in Sub-Saharan African Countries

Moussa Sigue, Moussa Coulibaly, Ollo Dah

University Thomas Sankara, Burkina Faso

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, management journal

Download Full-Text Pdf

doi

10.31014/aior.1992.03.03.273

Pages: 1174-1186

Keywords: Combined Effects, Quality of Institutions, Financial Development, Macroeconomic Performance, Sub-Saharan Africa

Abstract

The objective of this paper is to show the importance of institutional quality as a factor enhancing the contribution of financial development to macroeconomic performance in SSA. In this context, we first present the theoretical literature and the empirical debates on the subject. Next, we derive an endogenous growth model that addresses the relationship between financial development, institutional quality, and macroeconomic performance. Finally, two dynamic panel models were estimated using the GMM method over the period from 2010 to 2017 and on a sample of 38 SSA countries. The estimation results reveal that institutional quality is considered as an important factor to be taken into account in analyzing the impact of financial development on macroeconomic performance.

References

  1. Arellano, M., & Bond, S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. Review of Economic Studies, 277-297.

  2. Arestis, P., Panicos, D., Bassam, F., & Kostas, M. (2002). The Impact of Financial Liberalization Policies on Financial Development: Evidence from Developing Economies. International Journal of Finance & Economic, 109-121.

  3. Arestis, P., Panicos, D., Bassam, F., & Kostas, M. (2002). The Impact of Financial Liberalization Policies on Financial Development: Evidence from Developing Economies. International Journal of Finance & Economics, 7(2), 109-121.

  4. Barro, R. J. (1991). Economic Growth in a Cross Section of Countrie. The Quaterly Journal of Economics, 106(2), 407-443.

  5. Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models 87(1), 115-143. Journal of Econometrics, 87(1), 115-143.

  6. Demetriades, P., & Law, H., (2006). Finance, Institutions and Economic Development. International Journal of Finance & Economics, 11(3), 245-260.

  7. Dollar, D., & Levin, V. (2005). Sowing and reaping: institutional quality and project outcomes in developing countries. World Bank Policy Research Working Paper.

  8. Enrico, P., & Modigliani, F. (2000). Security Markets versus Bank Finance: Legal Enforcement and Investor Protection. International Review of Finance, 1(2), 81-96.

  9. Goldsmith, R. W. (1969). Financial Structure and Development. Yale University Press.

  10. Hall, R. E., & Charles, J. I. (1999). Why Do Some Countries Produce So Much More Output per Worker than Others? The Quarterly Journal of Economics, 114(1), 83-116.

  11. Igue, C. B. (2013). Intermédiation financière et croissance économique : une approche basée sur le concept d’efficacité-X appliquée à la zone UEMOA. L'Actualité économique, 89(1), 7-37.

  12. Islam, N. (1994). Growth Empirics: A Panel Data Approach. The Quaterly Journal of economics, 110(4), 1127‐1170.

  13. Kaufmann, D., Kraay, A., & Mastruzzi, M. (2010). The Worldwide Governance Indicators: A Summary of Methodology, Data and Analytical Issues. World Bank Policy Research Working Paper (5430). Récupéré sur http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1682130

  14. King, R. G., & Levine, R. (1993a). Finance and Growth: Schumpeter Might Be Right. Quarterly Journal of Economics, 108, 717-737.

  15. King, R. G., & Levine, R. (1993b). Finance, Entrepreneurship, and growth: Theory and evidence. Journal of Monetary Economics, 513-542.

  16. Knack, S., & Keefer, P. (1995). Institutions and Economic Performance: Measures. Economics and Politics, 7(3), 207-227.

  17. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (1998). Law and Finance. Journal of Political Economy, 106(6), 1113-1155. doi:10.1086/250042

  18. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (1997). Legal Determinants of External Finance. Journal of Finance, 52(3), 1131-1150.

  19. Landesmann, M., & Ugo, P. (1994). Institutions and economic change. Structural Change and Economic Dynamics, 5(2), 199-203.

  20. Levine, R. (1997). Financial Development and Economic Growth. Journal of, 35(2), 688-726.

  21. Levine, R. (1999). Law, Finance, and Economic Growth. ournal of Financial Intermediation, 8(1-2), 8-35.

  22. Mankiw, G. N., Romer, D., & Weil, D. N. (1992). A contribution to the empirics of economic growth. Quarterly Journal of Economics, 107(2), 407-437.

  23. Mijiyawa, A. G. (2010). Institutions et développement : Analyse des effets macroéconomiques des institutions et des réformes institutionnelles dans les pays en développement. Sciences de l’Homme et Société. Université d’Auvergne Clermont-Ferrand I. Récupéré sur https://tel.archives-ouvertes.fr/tel-00484905

  24. North, D. C. (1991). Institutions. Journal of Economic Perspectives, 97-112.

  25. Pagano, M., & Volpin, P. (2001). The Political Economy of Finance. Oxford Review of Economic Policy, 17(4), 502-519.

  26. Pesaran, H. M. (2004). General Diagnostic Tests for Cross Section Dependence in Panels. Cambridge Working Papers in Economics, 1-42.

  27. Pesaran, H. M. (2007). A simple panel unit root test in the presence of cross-section dependence. Journal of Applied Econometrics, 22, 265-312.

  28. Pistor, K., Martin, R., & Stanislaw, G. (2000). Law and Finance in Transition Economies. Economics of Transition, 8, 325-368.

  29. Rodrik, D., & Wacziarg, R. (2005). Do Democratic Transitions Produce Bad Economic Outcomes? American Economic Review Papers and Proceedings, 95(2), 50-55.

  30. Roe, M. J. (1999). Comparative Corporate Governance. The New Palgrave Dictionary on Law and Economics.

  31. Thorsten, B., Demirgüç-Kunt, A., & Levin, R. (2003). Law, Endowments and Finance. Journal of Financial Economics, 70(1), 137-181.

  32. Thorsten, B., Levine, R., & Loayza, N. (2000). Finance and the sources of growth. Journal of Financial Economics, 58(2), 261-300.

  33. Van, P. (1997). Issues in assessing the effect of interindustry R&D spillovers. Economic Systems Research, 9(4), 331-356.

  34. World Bank. (2020a). WDI. Récupéré sur World Development Indicators: https://databank.worldbank.org

  35. World Bank. (2020b). WGI. Récupéré sur Worldwide Governance Indicators: https://datacatalog.worldbank.org

bottom of page