Financial liberalization and economic growth in selected lower-middle income and upper-middle income countries of Africa, 1986 – 2017
Tubolayefa Ernest, Tamunopriye Jones Agiobenebo, Ezaal Okowa
Studies have shown that income level is key to the success of financial liberalization and in line with this we investigated the impact of financial liberalization on economic growth between upper middle income countries and lower middle income countries in Africa from 1986 – 2017. Secondary data were obtained from the World Bank data catalog and other journals. The study employed the Im, Pesaran and Shin (IPS) panel unit root to explore the stochastic properties of each series in the model and the Pool Mean Group (PMG)/Auto-Regressive Distributed Lag (ARDL) estimation for dynamic panel analysis and found that financial liberalization has had positive and significant effect on economic growth in upper-middle and lower-middle income countries. The study conclude that financial reforms enhance economic growth and thus recommend that more rational financial liberalization policies should be pursued by these countries so as to boost investors’ confidence for them to bring in the much needed capital required for investment which ultimately would translate to more growths in their economies; proper sequencing of financial reforms and these reforms should be designed in line with needs of an economy, among others.
Tubolayefa Ernest, Tamunopriye Jones Agiobenebo, Ezaal Okowa. Financial liberalization and economic growth in selected lower-middle income and upper-middle income countries of Africa, 1986 – 2017. International Journal of Multidisciplinary Research and Development, Volume 7, Issue 1, 2020, Pages 25-33