Search results
1 – 2 of 2Abdulhadi Aliyara Haruna and Abu Sufian Abu Bakar
This study aims to examine the effect of domestic financial deregulation on economic growth in five selected sub-Saharan African nation (SSA). The paper also explored the…
Abstract
Purpose
This study aims to examine the effect of domestic financial deregulation on economic growth in five selected sub-Saharan African nation (SSA). The paper also explored the interaction effect of domestic financial deregulation and corruption on growth.
Design/methodology/approach
The paper used Driscoll and Kraay standard errors based on the pooled ordinary least squares, which is robust to heteroskedasticity, cross-sectional dependence and autocorrelation.
Findings
The outcome indicates that domestic financial liberalization has accelerated growth in SSA economies. Similarly, evidence reveals that foreign direct investment and credit to the private sector by banks accelerate growth. However, evidence indicates that labour and capital negate growth. Also, the interaction term for domestic financial liberalization and corruption shows a negative influence on growth. The study, therefore, recommends that well-tailored policy design and strategy be implemented to provide a smooth and conducive business environment for investors.
Originality/value
Numerous studies have analysed the influence of financial deregulation on growth; however, none have examined the effects of domestic financial deregulation on growth in the context of SSA. Also, no studies have explored the interaction effect of domestic financial deregulation and corruption on growth.
Details
Keywords
Abdulhadi Aliyara Haruna and Abu Sufian Abu Bakar
This paper aims to examine the impact of interest rate liberalization on economic growth and the relevance of corruption in the five selected sub-Saharan African countries.
Abstract
Purpose
This paper aims to examine the impact of interest rate liberalization on economic growth and the relevance of corruption in the five selected sub-Saharan African countries.
Design/methodology/approach
The study used the modified version of Driscoll and Kraay’s model by Hoechle, which solved the effects of cross-sectional dependence and heteroscedasticity.
Findings
The findings reveal a positive impact of the index on economic growth, and it was found that foreign direct investment (FDI) and credit to private sector by banks (CPSB) all stimulate economic growth. The interaction terms of corruption with FDI and CPSB indicate negative effects that show how corruption erodes the benefits of liberalization. Finally, the paper recommends the pursuit of appropriate policies with the sole aim of eradicating corruption and providing a conducive environment for business.
Originality/value
The paper developed a composite domestic financial liberalization index to capture the timing and essential dimensions of the reform process. The study investigates the effect of interest rate liberalization on economic growth and the relevance of corruption. Most of the recent and past studies only examined the impact of interest rate reforms on growth without investigating the relevance of corruption.
Details