Publicação
Essays on financial markets in Africa
| Resumo: | Economic growth in a modern economy hinges on an efficient financial sector that pools domestic savings and mobilizes foreign capital for productive investments. Absent an effective set of financial institutions, productive projects will remain unexploited. Inefficient financial institutions will have the effect of taxing productive investment and thus reducing scope for increasing the stock equipment needed to compete globally. The effect is to substantially cut growth from what would have been possible given appropriate policies and market structures. In this context, this thesis focuses on three essays analyzing the impact of financial markets in development and income inequality. First, we assessed the impact of stock market development on growth in Africa. The study uses annual data from a panel of nine countries in Africa over the period 1992–2017. Panel Vector Autoregressive econometrics technique is used in data analysis. Our main findings are that stock market development has a positive effect on economic growth. The paper also finds that when using the impulse response function, economic growth reacts to the stock market for a period of eight years and then returns to the initial level. The second essay presents evidence about the relationship between private credit, stock market indicators, income inequality and poverty, using the annual data that ranges from 1992 to 2018 on nine African economies. We applied the estimation method of Autoregressive Distributed Lag (ARDL) to model the long-run effect. In Addition, we used Dumitrescu and Hurlin Panel causality to check the direction of causality. The results of long‐run estimates show that the stock market indicators have a significant positive impact on income inequalities, but have a negative and significant impact on poverty. Further, our findings show that private credit adversely reduces income inequalities. The results also establish significant short‐run causalities among stock market indicators, private credit, income inequalities, and poverty. Lastly, we examine the relationship between financial development and economic growth in Angola for the period of Q12002 to Q42018. The results show that there is evidence of a long-run relationship between financial development and real GDP per capita, when using the Bound test approach for cointegration. Furthermore, the results of the Error Correction Model (ECM) indicate that financial development has a negative impact on GDP growth when considering credit to private and broad money as proxies for financial development. On the other hand, the degree of intermediation has a positive impact on GDP growth. The Toda–Yamamoto causality test was carried out, which indicates a unidirectional causality relationship, running from real GDP per capita to a purely financial development proxy, which shows demand-following responses. Consequently, policymakers should adopt policies that sustain the benefits of financial developments for economic growth. |
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| Autores principais: | Serafim, Jelson Francisco Quintino |
| Assunto: | Stock market Economic growth Inequality Poverty Bolsa de Valores Crescimento Económico Desigualdade Pobreza |
| Ano: | 2023 |
| País: | Portugal |
| Tipo de documento: | tese de doutoramento |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório da Universidade de Lisboa |
| Resumo: | Economic growth in a modern economy hinges on an efficient financial sector that pools domestic savings and mobilizes foreign capital for productive investments. Absent an effective set of financial institutions, productive projects will remain unexploited. Inefficient financial institutions will have the effect of taxing productive investment and thus reducing scope for increasing the stock equipment needed to compete globally. The effect is to substantially cut growth from what would have been possible given appropriate policies and market structures. In this context, this thesis focuses on three essays analyzing the impact of financial markets in development and income inequality. First, we assessed the impact of stock market development on growth in Africa. The study uses annual data from a panel of nine countries in Africa over the period 1992–2017. Panel Vector Autoregressive econometrics technique is used in data analysis. Our main findings are that stock market development has a positive effect on economic growth. The paper also finds that when using the impulse response function, economic growth reacts to the stock market for a period of eight years and then returns to the initial level. The second essay presents evidence about the relationship between private credit, stock market indicators, income inequality and poverty, using the annual data that ranges from 1992 to 2018 on nine African economies. We applied the estimation method of Autoregressive Distributed Lag (ARDL) to model the long-run effect. In Addition, we used Dumitrescu and Hurlin Panel causality to check the direction of causality. The results of long‐run estimates show that the stock market indicators have a significant positive impact on income inequalities, but have a negative and significant impact on poverty. Further, our findings show that private credit adversely reduces income inequalities. The results also establish significant short‐run causalities among stock market indicators, private credit, income inequalities, and poverty. Lastly, we examine the relationship between financial development and economic growth in Angola for the period of Q12002 to Q42018. The results show that there is evidence of a long-run relationship between financial development and real GDP per capita, when using the Bound test approach for cointegration. Furthermore, the results of the Error Correction Model (ECM) indicate that financial development has a negative impact on GDP growth when considering credit to private and broad money as proxies for financial development. On the other hand, the degree of intermediation has a positive impact on GDP growth. The Toda–Yamamoto causality test was carried out, which indicates a unidirectional causality relationship, running from real GDP per capita to a purely financial development proxy, which shows demand-following responses. Consequently, policymakers should adopt policies that sustain the benefits of financial developments for economic growth. |
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