Abstract:

The objective of this paper is to examine the relationship between inclusion, financial innovation, and economic growth. The goal is to verify the existence of a bidirectional relationship between the three variables. For this purpose, we use the Panel Vector Autoregressive (PVAR) model in the Generalized Method of Moments (GMM) on data from 46 Sub-Saharan African countries. The results confirm the existence of a positive and unidirectional relationship between economic growth and financial innovation and the existence of a unidirectional relationship between financial inclusion and economic growth. Additionally, our results show that there is a bidirectional relationship between economic growth and investment. Regarding practical implications, this study jointly analyzes three current and interrelated topics that pose a problem for the African continent and expands the scarce literature on financial development and economic growth. As for originality, this study considers the possibility of a bidirectional relationship between inclusion, financial innovation, and economic growth using a sample of 46 sub-Saharan African countries covering the period 2005-2018, a fact that was ignored in previous studies when they examined only unidirectional causality

Keywords:

Financial Innovation, Financial Inclusion, Economic Growth, Panel Vector Autoregressive model (PVAR), SubSaharan Africa.

JEL Classification:

C33, C38, E21, E22, E26, G20.

How to Cite:

João Jungo*, Mara Madaleno and Anabela Botelho. The Relationship Between Inclusion, Financial Innovation and Economic Growth in Sub-Saharan African Countries: A PVAR Approach. [ref]: vol.20.2022. available at: https://refpress.org/ref-vol20-a6/