Trade openness and financial development in <scp>sub‐Saharan</scp> Africa: The role of institutional structures

Abeka, Mac Junior; Gatsi, John Gartchie; Appiah, Michael Owusu; Agyemang, Otuo Serebour

doi:10.1002/tie.22241

Cited by 9 publications

(9 citation statements)

References 42 publications

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“…The purpose of this test is to check whether the differentiated error term is second‐order serially correlated. Thus, the Arellano and Bond serial correlation Test (AR2) was employed to test for autocorrelation in the second order (see Abeka et al, 2022; Abeka, Amoah, et al, 2021; Abeka, Andoh, et al, 2021; Obuobi et al, 2022). If the null hypotheses of both tests are not rejected, then the model is consistent.…”

Section: Methodsmentioning

confidence: 99%

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Financial inclusion, economic freedom and financial stability in sub‐Saharan Africa

Frimpong

Yusuf

Boateng

et al. 2023

Thunderbird Intl Bus Rev

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Executive Summary The study examines the role of economic freedom in the relationship between financial inclusion and stability in sub‐Saharan African economies. By employing the System General Method of Moment and data from 39 sub‐Saharan African countries between 2004 and 2017, the study examines whether economic freedom (i.e., financial and business freedom) conditions the effect of financial inclusion on stability. Results from the study show evidence of a positive impact of financial inclusion on financial stability in sub‐Saharan African economies. Again, the results depict that financial inclusion could better enhance financial stability in economies with a high level of economic freedom (i.e., financial and business freedom). The results suggest that policymakers should allow financial institutions to operate with the level of freedom required to provide services at the lowest possible price. Further, it is recommended that policymakers should ensure that administrative requirements are minimal, bureaucracy costs are lesser, and licensing regulations for startups and expansion of existing firms are friendly. With this, associated increases in business and financial freedom would have promising implications for the relationship between financial inclusion and stability. Managerial Implications of the Study This research is very vital for firms in both the financial and nonfinancial. Specifically, managers of firms in the financial sector can embrace the level of financial freedom that would be allowed by the government, to come up with new and inclusive financial products, while putting in measures not to endanger the stability of the financial sector. Managers in the business sector could also take advantage of the business freedom that would be allowed by the government to diversify business operations, increase profitability and avoid causing nonperforming loan problems to banks. Originality/Value The study provides the first insight into how economic institutions condition the effect of financial inclusion on financial stability, which has not been previously studied.

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Section: Methodsmentioning

confidence: 99%

“…First, the study employed data on only 39 sub‐Saharan African countries, thereby generalizing to all sub‐Saharan African countries quite puzzling. However, since most SSA economies are in terms of both economic and financial landscapes (see Abeka et al, 2022), the results can be generalized to all SSA economies.…”

Section: Conclusion and Recommendationsmentioning

confidence: 99%

Financial inclusion, economic freedom and financial stability in sub‐Saharan Africa

Frimpong

Yusuf

Boateng

et al. 2023

Thunderbird Intl Bus Rev

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“…Companies in emerging economies, notably in Africa, operate in a distinct institutional setting compared to those in developed economies (Gordon et al ., 2012; Nnadi and Soobaroyen, 2015; Tawiah and Boolaky, 2019). Even though relatively weaker institutions characterise the continent, it has gradually improved over the past few years (Abeka et al ., 2022). Tawiah and Boolaky (2019) thus contend that cross-continental research that includes African nations as part of a full sample does not accurately reflect the African context, resulting in contradictory conclusions.…”

Section: Sars and Institutional Setting In Africamentioning

confidence: 99%

“…Second, Agbloyor et al (2016) and Abeka et al (2022) demonstrate that even though there are variations in perception of governance quality across several countries, the perception of governance quality in sub-Saharan African countries is similar and seems to be improving over the past few years. Thus, we argue that examination of the impact of governance quality on SARS by putting together data on advanced economies and emerging economies (see Avram et al, 2015) may yield results that may be misleading for policy.…”

Section: Introductionmentioning

confidence: 96%

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Institutional structures and strength of auditing and financial reporting standards in Africa

Adela

Abeka²,

Tackie³

et al. 2022

JAEE

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PurposeThe purpose of this paper is to investigate the effect of institutional structures on the strength of auditing and financial reporting standards.Design/methodology/approachThis paper employs a panel data of 36 African countries over the period 2000–2018. System generalised method of moments (SGMM) was employed to estimate the relationship between institutional structures and the strength of auditing and financial reporting standards in Africa.FindingsThe findings of this paper indicate a positive and statistically significant relationship between institutional structures and the strength of auditing and financial reporting standards. As a further analysis, the study finds that the relationship between institutional structures and the strength of auditing and financial reporting standards is stronger for economies with common-law accounting traditions than those with civil-law origin.Practical implicationsThe paper has important implications for countries striving to adopt and implement auditing and financial reporting standards fully. Such efforts must begin with establishing strong institutional structures in those countries.Originality/valueThis study presents the first empirical panel data evidence on the effect of institutional structures on the strength of auditing and financial reporting standards in Africa. Further, the methodology employed in this study can be regarded as effective in testing the phenomenon in other regions, or it can be employed as a guiding model for future research in the area.

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Institutions and venture capital market development in sub‐Saharan Africa

Boateng,

Owusu Junior,

Gatsi

et al. 2023

J of Intl Development

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We investigate the critical interplay between economic institutions and political institutions and assess their influence on venture capital market development in sub‐Saharan Africa (SSA). To address endogeneity concern in our model specification, the two‐step system generalised method of moments was employed on a sample of 34 SSA countries from 2007 to 2018. The findings reveal that strengthening disaggregated measures of economic institutions, comprising legal system and property rights, size of government, sound money, regulations, and freedom to trade internationally spur venture capital market development in SSA. Finally, the evidence indicates that political institutions condition the influence of economic institutions on venture capital market development. The implications for policy are further discussed.

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Trade openness and financial development in sub‐Saharan Africa: The role of institutional structures

Cited by 9 publications

References 42 publications

Financial inclusion, economic freedom and financial stability in sub‐Saharan Africa

Financial inclusion, economic freedom and financial stability in sub‐Saharan Africa

Institutional structures and strength of auditing and financial reporting standards in Africa

Institutions and venture capital market development in sub‐Saharan Africa

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