This paper aims to analyse the relationship between financial integration and financial development in Sub-Saharan Africa (SSA). To achieve this objective, we use a methodological approach based on panel data over the period 2000-2021 in 39 SSA countries. By estimating the panel threshold regression dynamic model (PTR Dynamic model) and using the Generalised method of moments (GMM), we show that there is a significant non-linear relationship between financial integration and financial development. This non-linear relationship refines existing evidence between financial integration and financial development. The optimal threshold of financial integration, defined as the level of financial integration that maximises financial development, is 69%. Therefore, the optimal level of financial integration is robust to sensitivity analysis, resulting in thresholds between 67% and 70%. The results show that financial integration has a differentiated effect on financial development depending on its sign. More specifically, below 69%, financial integration has a positive and significant effect on financial development; but above this 69% threshold, financial integration has a negative and significant effect on financial development. The public and monetary authorities must therefore take prudential measures into account in order to maintain the development of the financial system.
| Published in | International Journal of Economics, Finance and Management Sciences (Volume 11, Issue 5) |
| DOI | 10.11648/j.ijefm.20231105.11 |
| Page(s) | 212-222 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2024. Published by Science Publishing Group |
Financial Integration, Financial Development, PTR Dynamic, GMM
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APA Style
Munana Kabwika Cedric, Dial Mouhamadou Lamine, Diallo Mamadou Nouhou. (2023). A Re-Examination of the Effect of Financial Integration on Financial Development in Sub-Saharan Africa. International Journal of Economics, Finance and Management Sciences, 11(5), 212-222. https://doi.org/10.11648/j.ijefm.20231105.11
ACS Style
Munana Kabwika Cedric; Dial Mouhamadou Lamine; Diallo Mamadou Nouhou. A Re-Examination of the Effect of Financial Integration on Financial Development in Sub-Saharan Africa. Int. J. Econ. Finance Manag. Sci. 2023, 11(5), 212-222. doi: 10.11648/j.ijefm.20231105.11
AMA Style
Munana Kabwika Cedric, Dial Mouhamadou Lamine, Diallo Mamadou Nouhou. A Re-Examination of the Effect of Financial Integration on Financial Development in Sub-Saharan Africa. Int J Econ Finance Manag Sci. 2023;11(5):212-222. doi: 10.11648/j.ijefm.20231105.11
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Download@article{10.11648/j.ijefm.20231105.11,
author = {Munana Kabwika Cedric and Dial Mouhamadou Lamine and Diallo Mamadou Nouhou},
title = {A Re-Examination of the Effect of Financial Integration on Financial Development in Sub-Saharan Africa},
journal = {International Journal of Economics, Finance and Management Sciences},
volume = {11},
number = {5},
pages = {212-222},
doi = {10.11648/j.ijefm.20231105.11},
url = {https://doi.org/10.11648/j.ijefm.20231105.11},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20231105.11},
abstract = {This paper aims to analyse the relationship between financial integration and financial development in Sub-Saharan Africa (SSA). To achieve this objective, we use a methodological approach based on panel data over the period 2000-2021 in 39 SSA countries. By estimating the panel threshold regression dynamic model (PTR Dynamic model) and using the Generalised method of moments (GMM), we show that there is a significant non-linear relationship between financial integration and financial development. This non-linear relationship refines existing evidence between financial integration and financial development. The optimal threshold of financial integration, defined as the level of financial integration that maximises financial development, is 69%. Therefore, the optimal level of financial integration is robust to sensitivity analysis, resulting in thresholds between 67% and 70%. The results show that financial integration has a differentiated effect on financial development depending on its sign. More specifically, below 69%, financial integration has a positive and significant effect on financial development; but above this 69% threshold, financial integration has a negative and significant effect on financial development. The public and monetary authorities must therefore take prudential measures into account in order to maintain the development of the financial system.},
year = {2023}
}
TY - JOUR T1 - A Re-Examination of the Effect of Financial Integration on Financial Development in Sub-Saharan Africa AU - Munana Kabwika Cedric AU - Dial Mouhamadou Lamine AU - Diallo Mamadou Nouhou Y1 - 2023/09/20 PY - 2023 N1 - https://doi.org/10.11648/j.ijefm.20231105.11 DO - 10.11648/j.ijefm.20231105.11 T2 - International Journal of Economics, Finance and Management Sciences JF - International Journal of Economics, Finance and Management Sciences JO - International Journal of Economics, Finance and Management Sciences SP - 212 EP - 222 PB - Science Publishing Group SN - 2326-9561 UR - https://doi.org/10.11648/j.ijefm.20231105.11 AB - This paper aims to analyse the relationship between financial integration and financial development in Sub-Saharan Africa (SSA). To achieve this objective, we use a methodological approach based on panel data over the period 2000-2021 in 39 SSA countries. By estimating the panel threshold regression dynamic model (PTR Dynamic model) and using the Generalised method of moments (GMM), we show that there is a significant non-linear relationship between financial integration and financial development. This non-linear relationship refines existing evidence between financial integration and financial development. The optimal threshold of financial integration, defined as the level of financial integration that maximises financial development, is 69%. Therefore, the optimal level of financial integration is robust to sensitivity analysis, resulting in thresholds between 67% and 70%. The results show that financial integration has a differentiated effect on financial development depending on its sign. More specifically, below 69%, financial integration has a positive and significant effect on financial development; but above this 69% threshold, financial integration has a negative and significant effect on financial development. The public and monetary authorities must therefore take prudential measures into account in order to maintain the development of the financial system. VL - 11 IS - 5 ER -
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