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Vérification empirique du lien finance-croissance économique : approche non linéaire appliquée aux pays de la cedeao
[Empirical verification of the finance-economic growth link: non-linear approach applied to ecowas countries]

Author

Listed:
  • Dioum, Sokhna Bousso
Abstract
In this article, a non-linear approach is used to examine the effects of developing financial structures on the economic growth of West African states. To do this, we use the MMG-system to estimate quadratic models such as those proposed by Gambarta et al. (2014) for dynamic panels. Over the period [1998-2017], we show on the one hand that the marginal effect of the banking industry on economic growth increases initially, reaches a maximum and then gradually decreases. This demonstrates a non-linear relationship between increased banking activities and economic growth within the community, and confirms the findings of Hou and Cheng (2017) with low-income countries. On the other hand, a widening of capital markets positively affects the economic growth of West African countries. Overall, our study shows that the main contribution to weakening growth comes from increased banking activities and not from greater investor access to markets. To ensure stable growth, the West African authorities should focus on supporting expanding markets, strengthening liquidity and moderately controlling banking activities. Also, governments should encourage the writing of scientific articles.

Suggested Citation

  • Dioum, Sokhna Bousso, 2021. "Vérification empirique du lien finance-croissance économique : approche non linéaire appliquée aux pays de la cedeao [Empirical verification of the finance-economic growth link: non-linear approach," MPRA Paper 106855, University Library of Munich, Germany, revised 30 Mar 2021.
    • Handle: RePEc:pra:mprapa:106855
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    References listed on IDEAS

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    More about this item

    Keywords

    Economic growth; financial development; banking sector; financial market; production of scientific articles.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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