Article ID Journal Published Year Pages File Type
989291 World Development 2009 12 Pages PDF
Abstract

SummaryThis contribution tests for causality between financial deepening, trade openness, and economic development for 16 sub-Saharan African countries. The Hsiao-Granger method is used to add to the existing empirical evidence. Only limited support is found for the popular hypothesis of finance-led growth. In general, the evidence indicates that financial deepening and trade openness have swayed economic development rather marginally. In particular, the investigated countries have failed to benefit from financial deepening. Development strategies prioritizing financial or trade sector development hence cannot be supported.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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