Abstract
We discuss the link between financial development and economic growth through Total Factor Productivity (TFP) canal in African economies. First, we use a composite index to hierarchize financial development in 40 African countries. Then, we study this relationship by using the methodology of panel data based on the Breusch-Pagan LM Test and Hausman Test, to determine the nature of the specific effect, in a panel of 22 economies. The main results of our study show that the development of the financial sector does not promote total factors productivity in low-income and upper-middle-income countries. For the lower middle-income countries, the Finance-TFP relation- ship is significantly positive. The reforms of African financial systems should be designed and directed to increase the adequacy of financial services with the needs of each economy.
Recommended Citation
EZZAHID, Elhadj and ELOUAOURTI, Zakaria
(2018)
"Financial development and total factors productivity channel: Evidence from Africa,"
The Indonesian Capital Market Review: Vol. 10:
No.
2, Article 1.
DOI: 10.21002/icmr.v10i2.10827
Available at:
https://scholarhub.ui.ac.id/icmr/vol10/iss2/1
