This paper contributes to the understanding of the other neglected effects of foreign direct investment (FDI) by analysing how FDI affects financial development in the short run and long run for a panel of 49 African countries over the period 1990-2016. The empirical evidence is based on a pooled mean group approach. With three panels differentiated by income level, the following findings are established: first, while there is a positive and significant long-run relationship between FDI and financial development in Africa, in the short run the effect of FDI on financial development is negative. Second, the effect of FDI is positive and significant in the long run in the three sub-samples. However, in the short run, the effect of FDI is negative and significant in lower-income countries and non-significant in lower-middle-income and uppermiddle-income countries. Overall we find strong evidence supporting the view that FDI promotes financial development in African countries in the long run. * Njangang Henri (corresponding author), The The authors are indebted to the editor and two anonymous reviewers for their useful comments and suggestions that substantially improved the quality of this paper. All remaining errors are ours.
The objective of this study is to analyze the effect of competition on the cost and profit efficiency of banks in the Economic and Monetary Community of Central Africa (CEMAC), over the period [2003][2004][2005][2006][2007][2008][2009][2010]. The analysis is done in two stages. First, the stochastic frontier approach (SFA) permits us to estimate the efficiency scores and the competition levels measured by the adjusted Lerner index. Second, the competition measures thus obtained, and a set of control variables are introduced into a panel model to explain the cost and profit efficiencies. The results show that competition has been favorable to the profit efficiency, but not to the cost efficiency. This is because the diversification and the debtors' prime rates have evolved in the expected way. However, the creditors' prime rate, bank loans, inflation and the Gross Domestic Product (GDP) have evolved in an unexpected way. We recommend promotion of growth and a better inflation control by the government. As to the banks, they will gain from greater diversification of their products.
The purpose of this paper is to check the impact of corruption on the link between development assistance and economic growth in the countries of the CEMAC Zone. Thus, from our dynamic panel data model relating economic growth and the explanatory variables including official development assistance and the index of corruption, we use the Generalized Moments Method (GMM) to estimate our model; our sample consisting of the six countries of the CEMAC Zone (Cameroon, Congo, Gabon, Equatorial Guinea, Central African Republic and Chad) and our study period extends from 1996 to 2013. The results indicate that public support for short-term development has no significant effect on growth in the CEMAC Zone; on the contrary, public aid to long-term development has a positive and significant effect on economic growth. Moreover, the variable of interaction between public aid for short-term development and corruption has a negative and significant effect on growth while the long term, has a positive and significant effect on growth. This implies that long-term control strategies against corruption have achieved results such as flows of official development assistance have a positive impact on growth. It therefore appears urgent for the leaders of recipient countries to strengthen the fight against corruption to improve the impact of aid on growth in the CEMAC Zone.
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