Investigating the causality between financial inclusion, financial development and sustainable development in Sub‐Saharan Africa economies

The mediating role of foreign direct investment

Bibliographic Data

ID12705474
AuthorsJamiu Adetola Odugbesan (0000-0003-3301-396X, Department of Business Administration, Faculty of Economics and Administrative Sciences, institute of graduate studies Cyprus International University Nicosia Turkey, corresponding author), George N Ike (0000-0001-7100-6598, Department of Economics, Institute of Graduate Studies and Research, Faculty of Business and Economics Eastern Mediterranean University Famagusta Turkey), Gbolahan Olowu (0000-0002-0183-7238, Department of Business Administration, Faculty of Economics and Administrative Sciences, institute of graduate studies Cyprus International University Nicosia Turkey), Bosede Ngozi Adeleye (0000-0002-1274-714X, Department of Economics and Development Studies Covenant University Ota Nigeria)
Year2020
Volume22
Issue3
Publication date2020-12-02
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJournal of Public Affairs (JOURNAL)
Journal identifiersISSN: 1472-3891 • E-ISSN: 1479-1854
PublisherWiley (PUBLISHER • GB)
DOI10.1002/pa.2569
OpenAlexW3108312397
LanguageEN
Citations received15
References cited60

In developing economies, the role of the financial sector and foreign capital in the stimulation of sustainable production practices has not been very clear cut. In a bid to obtain a much clearer empirical perspective, the present study investigates the causal relationship between financial development, financial inclusion, foreign direct investment (FDI) and sustainable development in a panel of 33 Sub‐Saharan African (SSA) economies within the 2004–2018 study periods. Panel cointegration tests uncover the presence of a long‐run relationship among the variables in the model. Prior to determining the direction of causality, panel estimation procedures show the magnitude and signs of the long run coefficients. Panel Granger causality tests uncover bidirectional causality between financial inclusion and FDI as well as between financial development and FDI. Also uncovered is unidirectional causality from FDI towards sustainable development and resource rents. This study suggests that the policymakers in SSA should optimize the level of financial development which requires a vigorous improvement so as to ensure higher potential benefits for the sustainability of SSA region through financial sector

Causality (physics · Cointegration · Econometrics · Economic rent · Economics · Financial inclusion · Financial market · Financial sector · Financial sector development · Financial services · Foreign direct investment · Granger causality · Macroeconomics · Market economy · Monetary economics · Panel data · Sustainable development · Economic Growth and Development · Energy, Environment, Economic Growth · Fiscal Policy and Economic Growth · Finance

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