IDEAS home Printed from https://ideas.repec.org/a/eme/ajemsp/ajems-06-2021-0291.html
   My bibliography  Save this article

The relationship between financial development and economic growth in Eswatini (formerly Swaziland)

Author

Listed:
  • Siphe-okuhle Fakudze
  • Asrat Tsegaye
  • Kin Sibanda

Abstract

Purpose - The paper examined the relationship between financial development and economic growth for the period 1996 to 2018 in Eswatini. Design/methodology/approach - The Autoregressive Distributed Lag bounds test (ARDL) was employed to determine the long-run and short-run dynamics of the link between the variables of interest. The Granger causality test was also performed to establish the direction of causality between financial development and economic growth. Findings - The ARDL results revealed that there is a long-run relationship between financial development and economic growth. The Granger causality test revealed bidirectional causality between money supply and economic growth, and unidirectional causality running from economic growth to financial development. The results highlight that economic growth exerts a positive and significant influence on financial development, validating the demand following hypothesis in Eswatini. Practical implications - Policymakers should formulate policies that aims to engineer more economic growth. The policies should strike a balance between deploying funds necessary to stimulate investment and enhancing productivity in order to enliven economic growth in Eswatini. Originality/value - The study investigates the finance-growth linkage using time series analysis. It determines the long-run and short-run dynamics of this relationship and examines the Granger causality outcomes.

Suggested Citation

  • Siphe-okuhle Fakudze & Asrat Tsegaye & Kin Sibanda, 2021. "The relationship between financial development and economic growth in Eswatini (formerly Swaziland)," African Journal of Economic and Management Studies, Emerald Group Publishing Limited, vol. 13(1), pages 15-28, October.
    • Handle: RePEc:eme:ajemsp:ajems-06-2021-0291
    DOI: 10.1108/AJEMS-06-2021-0291
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/AJEMS-06-2021-0291/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/AJEMS-06-2021-0291/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/AJEMS-06-2021-0291?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Strike Mbulawa & Samuel Chingoiro & Robert Machera, 2022. "Dynamics of the remittances: Fnancial development nexus in Sub Saharan Africa (SSA)," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(4), pages 171-182, June.
    2. Brian Muyambiri & John-Baptiste Mabejane, 2023. "The Nexus Of External Debt, Private Investment And Financial Development: Evidence From Selected Sacu Countries," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 21(1), pages 25-40, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:ajemsp:ajems-06-2021-0291. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.