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Foreign bank presence and inclusive growth in Africa: the moderating role of financial development

Author

Listed:
  • Khadijah Iddrisu
  • Joshua Yindenaba Abor
  • Thadious Kannyiri Banyen

Abstract

Purpose - The purpose of this study is to assess the extent to which the nexus between foreign bank presence (FBP) and inclusive growth is being impacted by the financial development. Design/methodology/approach - The study used a two-stage system generalized method of moment (GMM), using 28 African countries from the period 2000 to 2018. Findings - The study found a positive effect of FBP on inclusive growth. While financial development magnifies the positive effect of FBP, inclusive growth nexus, it has a direct effect on inclusive growth. Practical implications - For Africa to ascertain the positive effect of FBP on inclusive growth, financial system must be developed to reduce the cream-skim behavior of foreign banks. Originality/value - This paper assess the extent to which developing economy's developed financial system form synergies with FBP to further enhance the inclusiveness of growth.

Suggested Citation

  • Khadijah Iddrisu & Joshua Yindenaba Abor & Thadious Kannyiri Banyen, 2023. "Foreign bank presence and inclusive growth in Africa: the moderating role of financial development," African Journal of Economic and Management Studies, Emerald Group Publishing Limited, vol. 15(3), pages 349-365, November.
  • Handle: RePEc:eme:ajemsp:ajems-11-2022-0444
    DOI: 10.1108/AJEMS-11-2022-0444
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