Does Government Size Moderate Finance- Growth Nexus in Sub-Saharan Africa?

Year 2018, Volume: 3 Issue: 1, 1 - 14, 20.04.2018

Mustapha Jobarteh Hüseyin Kaya

Abstract

We ask how government size impacts the relationship between financial development and
economic growth for Sub-Saharan African countries during 1980-2014 period. The empirical
strategy relies on panel data techniques of panel smooth transition regression (PSTR)
and dynamic GMM approaches to test for non-linearities in finance-growth nexus and
endogenously model the non-linearity to depend on government size. Preliminary results
from the dynamic panel model show that finance-growth nexus is non-linear. Upon delving
further into the non-linearities, our results show that financial development impacts
economic growth positively only beyond a necessary threshold level of government expenditure
share of 12 percent of GDP. Given the large informal sector and the pervasive market
failures in Sub-Saharan African economies, governments need a minimum threshold level
of expenditure to “correct” the credit markets and “formalize” the large informal financial
sector. Therefore, Sub-Saharan African countries should not shy away from government
expenditures that are meant to “correct” market failures in the financial sector or “formalize”
the large informal financial sector to make finance work for economic growth.

Keywords

Financial Development, Growth, non-linearity, Government Size, PSTR, System GMM, Sub-Saharan Africa

Sahra-Altı Afrikada Kamu Sektörünün Büyüklüğü Finans-Büyüme İlişkinde Etkili Mi?

Abstract

Bu çalışmada, Sahra-altı Afrika ülkelerinde kamu sektörünün büyüklüğünün finansal
gelişmişlik ve ekonomik büyüme ilişkisini nasıl etkilediği analiz edilmektedir. Finansal
gelişmişlik-ekonomik büyüme ilişkisinin doğrusallığı ve kamu sektörü büyüklüğünün bu
ilişkideki rolü PSTR yöntemi ve dinamik panel GMM yöntemleri kullanılarak 1980-2014
dönemini için incelenmiştir. Sonuçlar finansal gelişmişlik-ekonomik büyüme ilişkisinin
doğrusal olmadığını ve kamu sektörünün büyüklüğünün GSYH’ye oranının yüzde 12 eşik
değerinden yüksek olduğu durumlarda finansal gelişmişliğin ekonomik büyüme üzerinde
pozitif bir etkiye sahip olduğunu göstermektedir. Sahra-altı Afrika ülkelerinde yüksek kayıtdışılık
ve yaygın piyasa aksaklıkları bulunmaktadır. Kredi piyasasındaki aksaklıkların
giderilmesi ve kayıtdışılık oranın yüksek olduğu finansal sektörün kayıt altına alınabilmesi
için asgari bir düzeyde kamu harcamasına ihtiyaç vardır. Dolayısıyla, finansal sektörün
ekonomik büyümeyi destekler bir mahiyete kavuşabilmesi için Sahra-altı Afrika ülkelerinde
kamu, piyasa aksaklıklarını düzeltici ve kayıtdışılığı azaltıcı harcama yapmaktan çekinmemelidir.

Keywords

Finansal Gelişmişlik, Doğrusal Olmayan, Kamu Sektörünün Büyüklüğü, PSTR, Sistem GMM, Sahra-altı Afrika

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