Recently, much attention is given to financial-growth nexus, but largely via the physical capital accumulation channel. This study differed by examining this nexus, via the human capital accumulation channel in the ECOWAS region. It employed panel cointegration approaches as well as the FMOLS, DOLS. The results revealed that bank private credit and domestic private credit contribute significantly to economic growth in the ECOWAS, both directly and through their influence on human capital accumulation. These results imply that providing access to credit to both enterprises and individuals, through appropriate financial policies, will encourage economic growth in the ECOWAS region.
The role of financial development to the growth process is recognised in the literature and policy cycles, therefore, what determines it is also worthy of attention. This study investigates the institutional and macroeconomic determinants of financial development in 50 OIC member countries from 2003 to 2011. Dynamic panel approach-system-GMM is employed. The results revealed that overall level of income positively influences financial development, and exchange rate encourages financial depth and lending activities. Financial openness is found to promote financial depth only, while institutional quality promotes lending activities. On the other hand, inflation stimulates bank private credit and reduces the depth of the financial sector. This mixed results implied that, policy makers in the OIC countries, shall adopt a hybrid of economic and financial policies as well as implement political, legal and governance reforms in order to enhance financial development and hence promote economic growth.
The role of financial development to the growth process is recognised in the literature and policy cycles, therefore, what determines it is also worthy of attention. This study investigates the institutional and macroeconomic determinants of financial development in 50 OIC member countries from 2003 to 2011. Dynamic panel approach-system-GMM is employed. The results revealed that overall level of income positively influences financial development, and exchange rate encourages financial depth and lending activities. Financial openness is found to promote financial depth only, while institutional quality promotes lending activities. On the other hand, inflation stimulates bank private credit and reduces the depth of the financial sector. This mixed results implied that, policy makers in the OIC countries, shall adopt a hybrid of economic and financial policies as well as implement political, legal and governance reforms in order to enhance financial development and hence promote economic growth.
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