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The threshold effect of political institutions on the finance-growth nexus: Evidence from Sub-Saharan Africa

Author

Listed:
  • Walid Benayed

    (Higher Institute of Management of Gabes, University of Gabes, Tunisia)

  • Nouha Bougharriou

    (Faculty of Economics and Management of Sfax, University of Sfax, Tunisia)

  • Foued Badr Gabsi

    (Faculty of Economics and Management of Sfax, University of Sfax, Tunisia)

Abstract

This study explores the effect of political institutions on the finance-growth nexus for a sample of 24 Sub-Saharan African countries over the period 2002-2011. Using the recent dynamic panel threshold model proposed by Seo and Shin (2016), we found that financial development has a growth-enhancing effect only in countries with strong political institutions. The results are robust across different institutional indicators.

Suggested Citation

  • Walid Benayed & Nouha Bougharriou & Foued Badr Gabsi, 2020. "The threshold effect of political institutions on the finance-growth nexus: Evidence from Sub-Saharan Africa," Economics Bulletin, AccessEcon, vol. 40(3), pages 2484-2493.
    • Handle: RePEc:ebl:ecbull:eb-20-00340
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    References listed on IDEAS

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    Cited by:

    1. Clement Olalekan Olaniyi, 2022. "On the transmission mechanisms in the finance–growth nexus in Southern African countries: Does institution matter?," Economic Change and Restructuring, Springer, vol. 55(1), pages 153-191, February.
    2. Hazwan Haini & Lutfi Abdul Razak & Pang Wei Loon & Sufrizul Husseini, 2023. "Re-examining the finance–institutions–growth nexus: does financial integration matter?," Economic Change and Restructuring, Springer, vol. 56(3), pages 1895-1924, June.
    3. Isaac Ofoeda & Lordina Amoah & Ebenezer Bugri Anarfo & Joshua Yindenaba Abor, 2024. "Financial inclusion and economic growth: What roles do institutions and financial regulation play?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(1), pages 832-848, January.
    4. Rihab Bousnina & Foued Badr Gabsi, 2022. "Current Account Balance and Financial Development in MENA Countries: The Role of Institutions," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(1), pages 109-142, March.

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    More about this item

    Keywords

    political institutions; financial development; dynamic panel threshold;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • G2 - Financial Economics - - Financial Institutions and Services

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