How Global Financial Markets Affect Sub-Saharan Africa

Deléchat, Corinne; Ramirez, Gustavo; Wagh, Smita; Wakeman-Linn, John

doi:10.1057/imfsp.2009.29

Cited by 10 publications

(5 citation statements)

References 27 publications

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“…Earlier studies by Klein and Olivei (), Bekaert, Harvey, and Lundblad (), and Edwards () attest to the positive impact of financial integration on both economic growth and financial development. Later evidence from Quinn and Toyoda (), Delechat et al (), Mahajan and Vermar (), and Smith et al () also confirm the positive impact of financial integration on financial development. Though these studies have shown a positive relationship between financial integration and economic growth, in between these studies, there has also been a dissenting voice in the form of literature that has also shown a negative or mixed relationship.…”

Section: Literature Reviewmentioning

confidence: 85%

“…However, empirical evidence on the impact of financial integration has shown divergent views (see Delechat, Ramirez, Wagh, & Wakeman‐Linn, ; Gehringer, ; Mahajan & Vermar, ; Mougani, ; Rodrik, ; Smith, Ketley, & Chaponda, ). Earlier studies by Klein and Olivei (), Bekaert, Harvey, and Lundblad (), and Edwards () attest to the positive impact of financial integration on both economic growth and financial development.…”

Section: Literature Reviewmentioning

confidence: 99%

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Regional financial integration and its impact on banking development: Evidence from Southern African Development Community countries

Tembo

Makina

2020

Bus Strat Dev

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The study investigated the impact of regional financial integration on banking sector development with specific focus on the impact of the Southern African Development Community protocols on trade and finance and investment. A total of 14 countries made up the study sample, and the panel cointegration fully modified ordinary least squares model (FMOLS) alongside the generalized method of moments (GMM) were used to estimate the nature of the impact. Study findings showed that regional integration through the protocol on trade had a positive and significant impact on size and efficiency of the banking sector using the FMOLS estimator. GMM estimations for the same variables were largely insignificant. Study findings also pointed to an improvement in global financial integration indicators as a result of the trade protocol, which in turn also contributed to an increase in the level of monetization of regional financial markets. The finance and investment protocol had a positive and significant impact on private sector credit for both estimators and largely insignificant relationship with broad money. The study also observed the complimentary relationship between institutional quality and social capital in the financial development process indicating the importance of policies that strengthen sound legal systems, protect property rights, and enhance the rule of law.

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Section: Literature Reviewmentioning

confidence: 85%

Section: Literature Reviewmentioning

confidence: 99%

Regional financial integration and its impact on banking development: Evidence from Southern African Development Community countries

Tembo

Makina

2020

Bus Strat Dev

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“…Notably, wholly or partly afro-centered studies have been documented on the association of African Stock Markets with the global financial eco-system. For example, Alagidede (2007) for two Latin American countries, one Asian country, three industrialized economies and four African countries; Delechat et al . (2010) for SSA countries; Agyei-Ampomah (2011) for 10 African countries; Okoli (2012) for Nigeria; Kapingura et al.…”

Section: Review Of Related Literaturementioning

confidence: 99%

Evaluating the interactive effect of domestic and global stock market variables on the depth of the financial system in Sub-Saharan African countries: a panel ARDL approach

Kalu

Arize

Ilo

et al. 2022

JES

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PurposeThis study investigated the interactive impact of global and domestic stock market variables on the depth of the financial system in Sub-Saharan African (SSA) countries from 1990 to 2018.Design/methodology/approachThe study used the mean group and pooled mean group estimators for the dynamic heterogeneous panel.FindingsThe results provide strong statistical evidence that the depth of the financial system in SSA countries is influenced by a combination of local and international stock market indicators. While the local variables exert a positive influence, the global indicator tends to negatively affect the depth of the system, particularly the monetization ratio.Practical implicationsWhile the tendency of portfolio adjustments and reversal can be inferred, the study stresses the need for a more globalized approach to financial policy formulation and implementation even as the trend of global financializaton gets more robust and more profound.Originality/valueThis study is unique in that, unlike prior ones, it has extended the debate on the role of the stock market in financial deepening from a domestic to an international dimension. Financial policy making can be aided by the authors' findings through looking at the financial deepening-stock market linkage from both domestic and globalized perspectives.

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“…These markets are likely to show a high degree of financial market integration. Deléchat et al (2010), for instance, argue that capital market development leads to increased capital inflows; this may consequently lead to a surge in financial market integration.…”

Section: Economic Characteristics Of Emerging Marketsmentioning

confidence: 99%

Investment, financial sector development and the degree of emerging markets integration

Boamah

2019

JFEP

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Purpose The purpose of this paper is to explore the co-movements among emerging markets. The authors, additionally, investigate the driven force of the within emerging markets integration. The authors provide evidence of volatility clustering, leverage effect and time-varying integration of emerging markets. Design/methodology/approach The study used dynamic conditional correlation techniques to estimate the time-varying conditional correlations among emerging markets. The cross-sectional and time series variations in the within emerging markets correlations are then described by various market and economic factors. Findings The authors show that investment, domestic credit to the private sector and import of financial services have a positive relation within emerging markets co-movements. However, claim on central government, current account balance and financial services exports have a negative relation with the integration among emerging markets. Evidence is also provided that liquidity and market depth explain the correlation between emerging markets. Originality/value The findings show that emerging markets ability to convert domestic assets into investments appears to be the single most important factor influencing with in emerging markets integration. The findings indicate that across-emerging markets diversification potential exists.

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How Global Financial Markets Affect Sub-Saharan Africa

Cited by 10 publications

References 27 publications

Regional financial integration and its impact on banking development: Evidence from Southern African Development Community countries

Regional financial integration and its impact on banking development: Evidence from Southern African Development Community countries

Evaluating the interactive effect of domestic and global stock market variables on the depth of the financial system in Sub-Saharan African countries: a panel ARDL approach

Investment, financial sector development and the degree of emerging markets integration

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