How can economic and political liberalisation improve financial development in African countries?

Enowbi Batuo, M. and Mlambo, K. 2009. How can economic and political liberalisation improve financial development in African countries? Journal of Financial Economic Policy. 2 (1), pp. 35-59.

TitleHow can economic and political liberalisation improve financial development in African countries?
AuthorsEnowbi Batuo, M.
Mlambo, K.
Abstract

The objective of this paper is to study the interactions between Economic liberalisation, Political liberalisation and Financial development in African countries. More specifically, we seek to establish the impact of Economic, Political and institutional openness on financial deepening. The empirical approach will be two-step procedure, first using a difference in difference method to show the various aspect of financial liberalisation on economic and political freedom while the second step will be using panel data techniques from period 1990 to 2005. The estimation results can be summarised as the following, first, Economic and financial liberalisation did account significantly for the financial development performance. While political stability show a positive overall effect on financial development, the association with Political freedom is consistent only after controlling the endogeneity of Political freedom on financial development. This result indicates that the transformation of the political and economic environment has improved the performance of the financial sector.

JournalJournal of Financial Economic Policy
Journal citation2 (1), pp. 35-59
ISSN1757-6385
Year2009
PublisherEmerald Publishing Limited
Web address (URL)http://www.emeraldinsight.com/doi/abs/10.1108/17576381011055334
Publication dates
Published2009

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