Proceedings of The 6th International Conference on Advanced Research in Business, Management and Economics
Peter Walker Thompson
This study endeavors to explore whether financial permeation stimulates economic growth in African region. To answer this, we collect data of 20 African economies for the duration of 2016 to 2020 and apply panel unit root, Granger causality, and regression techniques. The regression results controlled for country and time effects reveal that various indicators of financial permeation have substantial positive impact on the economic growth of African economies. Based on the findings of Granger causality, we find that financial permeation as well as economic openness has mutual causalities with economic growth. Therefore, it seems rational to conclude that financial permeation has positive impact on the economic growth in African economies. We also find a negative impact of financial crisis (2015-2019) on economic growth of African countries.