Financial Development and Economic Growth: Evidence from Ghana

The International Journal of Business and Finance Research, v. 7 (5) p. 61-76

16 Pages Posted: 5 Sep 2013

See all articles by Michael Adusei

Michael Adusei

Kwame Nkrumah University of Science and Technology, Ghana

Date Written: 2013

Abstract

The paper employs cointegration, Fully-Modified Ordinary Least Squares (FMOLS), error correction and the Generalized Method of Moments (GMM) techniques to investigate the relationship between economic growth and financial development using annual time series data (1971-2010) from Ghana. Three measures of financial development are used: domestic credit as a share of GDP; domestic credit to private sector as a share of GDP and broad money supply as a share of GDP. Evidence from our data suggests that financial development undermines economic growth in Ghana. The paper, therefore, cautions against financial liberalization in Ghana.

Keywords: Ghana, Financial development, Economic growth, Credit, Size of government

JEL Classification: G20, D90, E02, E44, C13, C22

Suggested Citation

Adusei, Michael, Financial Development and Economic Growth: Evidence from Ghana (2013). The International Journal of Business and Finance Research, v. 7 (5) p. 61-76, Available at SSRN: https://ssrn.com/abstract=2261992

Michael Adusei (Contact Author)

Kwame Nkrumah University of Science and Technology, Ghana ( email )

Faculty of Law
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