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Institutions and Financial Development in African Countries: An Empirical Analysis

Author

Listed:
  • Séraphin PRAO YAO*

    (Professor-Researcher at Alassane Ouattara University (Ivory Coast))

  • Kamalan Eugène

    (Professor-Researcher at Alassane Ouattara University (Ivory Coast))

Abstract

This study empirically investigates the impact of institutional variables on financial development in 29 African countries. The Pooled Mean Group estimation method was applied to annual data covering the 2000 to 2014 period. The results show that in the short run, economic freedom has a positive impact on financial development. In the long term, democracy has a negatve impact on financial development while corruption and economic freedom positively affect financial development. This suggests that promoting economic freedom is conducive to financial development. However, in African countries, democracy is not in favour of financial development.

Suggested Citation

  • Séraphin PRAO YAO* & Kamalan Eugène, 2018. "Institutions and Financial Development in African Countries: An Empirical Analysis," Business, Management and Economics Research, Academic Research Publishing Group, vol. 4(5), pages 43-50, 05-2018.
    • Handle: RePEc:arp:bmerar:2018:p:43-50
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    References listed on IDEAS

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    2. Gonzálvez-Gallego, Nicolás & Pérez-Cárceles, María Concepción, 2021. "Cryptocurrencies and illicit practices: The role of governance," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 203-212.

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    More about this item

    Keywords

    Legal institutions; Financial development; Financial intermediaries; Democracy.;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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