Financial Globalization and Economic Growth in Sub-Saharan Africa: Evidence from Panel Cointegration Tests
Africa Journal of Blackwell Publishing Ltd, Vol.27, NO.3, p.187-198
This paper examines the long-run relationship between ﬁnancial globalization and economic growth in subSaharan Africa using panel unit root tests, panel cointegration tests and panel multivariate ECM. The study ﬁnds that the variables are stationary at ﬁrst difference — I(1). Also, the results reveal that all the variables are cointegrated, that is, they are related in the long run. The results of the ECT test within the framework of panel multivariate ECM conﬁrm the cointegration tests. The paper concludes that there is a long-run relationship between ﬁnancial globalization and economic growth in subSaharan Africa. The paper argues that sub-Saharan African economies will beneﬁt from the era of ﬁnancial globalization in the long run in as much as the governments promote and encourage sound macroeconomic policies and strong institutions.