nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2017‒08‒27
three papers chosen by
Georg Man

  1. Effect of Financial Inclusion on Household Consumption in Nigeria By Seck, Ousmane; Naiya, Ismaeel Ibrahim; Muhammad, Aliyu Dahiru
  2. Financial development, rule of law and wealth inequality : Bayesian model averaging evidence By Horvath, Roman; Horvatova, Eva; Siranova, Maria
  3. Volatility and Economic Growth in the Twentieth Century By Mercedes Campi; Marco Due\~nas

  1. By: Seck, Ousmane (The Islamic Research and Teaching Institute (IRTI)); Naiya, Ismaeel Ibrahim (Islamic Development Bank, Jeddah, Saudi Arabia); Muhammad, Aliyu Dahiru (International Institute of Islamic Banking and Finance, Bayero University Kano)
    Abstract: The recent awareness of the important role of finance in economic growth, development and poverty reduction has stimulated interests of policy makers and other stakeholders in increasing financial access to vast majority of the people. Although there are several studies that investigate the effects of financial inclusion on households both at macro and micro levels, few studies focus on its impact on welfare of the poor and how to move them out of poverty. It is noteworthy that there is evidence of voluntary exclusion from the banking system in Nigeria, with some individuals shunning conventional banking system due to the prohibition of interest in Islam. Based on the data of Living Standards and Demographic survey of 2012-2013, this paper investigates the effect of financial inclusion on the households’ welfare through consumption in Nigeria. The study employs the approach of panel data to analyze the effects of financial inclusion on household consumption, controlling for the endogeneity of the financial inclusion itself. The paper finds that access to finance has a positive impact on households’ consumption. This has implication for policy makers and practitioners to provide access to finance for poverty reduction in the country. Similarly, in addition to increasing the financial resources available for financing SMEs and households, Islamic finance could be useful in improving access to finance by attracting the voluntarily excluded segment of the population by offering them an alternative form of banking.
    Keywords: Islamic Finance; Financial Inclusion; Nigeria; Household Consumption
    JEL: C26 D10 E21 G02 G21
    Date: 2017–02–20
  2. By: Horvath, Roman; Horvatova, Eva; Siranova, Maria
    Abstract: We examine the determinants of financial development using our global sample and employing a rich set of measures of financial development that assess the degree of depth, access, stability and efficiency of financial intermediaries. We use Bayesian model averaging to test competing theories within this unifying framework. Examining nearly 40 potential determinants of financial development, we find that the rule of law and the level of economic development are the most important. Wealth inequality is irrelevant for banking sector development but positively associated with stock market development. Finally, our results suggest that financial market regulations matter for stock market efficiency and financial stability.
    JEL: G10 G20
    Date: 2017–08–21
  3. By: Mercedes Campi; Marco Due\~nas
    Abstract: The twentieth century was a period of outstanding economic growth together with an unequal income distribution. This paper analyses the international distribution of growth rates and its dynamics during the twentieth century. We show that the whole century is characterized by a high heterogeneity in the distribution of GDP per capita growth rates, which is reflected in different shapes and a persistent asymmetry of the distributions at the regional level and for countries of different development levels. We find that in the context of the global conflicts that characterized the first half of the twentieth century and involved mainly large economies, the well-known negative scale relation between volatility and size of countries is not significant. After the year 1956, a redistribution of volatility leads to a significant negative scale-relation, which has been recently considered as a robust feature of the evolution of economic organizations. Our results contribute with more empirical facts that call the attention to traditional macroeconomic theories to better explain the underlying complexity of the growth process and sheds light on its historical evolution.
    Date: 2017–08

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