Abstract
This paper investigates the relationship between financial development and economic growth in 12 East African countries (Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Rwanda, Seychelles, Sudan, Tanzania, and Uganda) for the period 1981-2007. The dynamic panel generalized method of moments (GMM) estimation is employed to test whether financial sector development has a positive impact in economic growth of East Africa. Theresults show that each of 2 financial development measures (domestic credit provided to the private sector and liquid liability) has a positive impact on economic growth and is statistically significant at the 5% level. These results provide additional evidence to the literature. The findings suggest that governments in East Africa can spur long run and sustainable economic growth by developing their financial sectors. Therefore, policies aimed at improving financial development and intermediation should be promoted.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
