Effect of financial development on economic growth in sub Saharan African count
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Date
2023
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KNUST
Abstract
Due to the imperativeness of the nexus between financial development and economic growth several researchers have underscore this topic as important and effective for quantifying the economic wellbeing of a country. For many years, how financial development is contributing to economic growth has been the subject of matter in a number of debates among economists. As such there are several empirical and theoretical assumptions attempting to shed more emphasis on these debates. The main objective of the study is to examine the effect of financial development on economic growth. Specifically, the study aimed to address the effect of financial development on economic growth and the determinants of economic growth. The study adopted an explanatory research design. The study was based a quantitative research approach. For estimation strategy, the study applied the ordinary least squared. The study used the pooled Ordinary Least Square, fixed effect and random effect. The study employed secondary data from the period of 10 years from 2012 – 2021. The study used eviews in performing the analyses. The following analyses were performed; descriptive statistics, correlation, Hausman test as well as regression analysis. The study found that exchange rate, monetary policy, and human development index are positive and significant determinants of GDP. However, inflation and trade openness are significant and negative determinants of GDP whereas FDI is a positive and insignificant determinant of GDP. The study recommends that finding the government should implement policies to maintain a stable exchange rate and promote monetary policies that stimulate economic growth. Investing in human development is also recommended to promote economic growth. Additionally, the government should control inflation and promote trade openness to boost economic growth. The government should also encourage foreign direct investment (FDI) to promote economic growth, but other factors should be considered when making decisions about FDI.
Description
A thesis submitted to the department of accounting and finance, Kwame Nkrumah university of science and technology, school of business in partial fulfillment for the award of the degree of master of business administration (finance option)