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Financial Development, Institutions and Economic Growth in North African Countries

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  • Imen Mohamed Sghaier

Abstract

This paper investigates the relationships between financial development (FD), institutions and economic growth on a panel of four North African countries (Tunisia, Morocco, Algeria and Egypt), over a 5-year period from 1996 to 2015. Using the dynamic generalized method of moments (GMM) in a panel data analysis, we found that FD has a positive effect on economic growth. We also found that institutions appear to be working as a complement to FD and, that the effect of FD is more pronounced in the presence of the institutional quality variable. As a policy implication, we recommend that policy makers place special importance on implementing policies that result in the deepening of financial systems, including a sound institutional framework. Thus, by promoting the development of a country’s financial system, economic growth will be accelerated.

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  • Imen Mohamed Sghaier, 2018. "Financial Development, Institutions and Economic Growth in North African Countries," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 21(69), pages 53-72, September.
    • Handle: RePEc:rej:journl:v:21:y:2018:i:69:p:53-72
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    More about this item

    Keywords

    financial development; institutions; economic growth; Panel data analysis.;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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