Financial Development and Pre-Historic Geographical Isolation: Global Evidence

2017 African Governance and Development Institute WP/17/041 Forthcoming: Financial History Review

30 Pages Posted: 12 Oct 2017

See all articles by Oasis Kodila-Tedika

Oasis Kodila-Tedika

University of Kinshasa - Department of Economics

Simplice Asongu

African Governance and Development Institute

Matthias M. Cinyabuguma

University of Maryland, Baltimore County (UMBC) - Department of Economics

Vanessa S. Tchamyou

African Governance and Development Institute

Date Written: January 12, 2017

Abstract

Using cross-country differences in the degree of isolation before the advent of technologies in sea and air transportation, we assess the relationship between geographic isolation and financial development across the globe. We find that pre-historic geographical isolation has been beneficial to development because it has contributed to contemporary cross-country differences in financial intermediary development. The relationship is robust to alternative samples, different estimation techniques, outliers and varying conditioning information sets.

The established positive relationship between geographic isolation and financial intermediary development does not significantly extend to stock market development.

Keywords: Financial development; Isolation; Agglomeration; Globalization

JEL Classification: F15; G15; N7; O16; O50

Suggested Citation

Kodila-Tedika, Oasis and Asongu, Simplice and Cinyabuguma, Matthias M. and S. Tchamyou, Vanessa, Financial Development and Pre-Historic Geographical Isolation: Global Evidence (January 12, 2017). 2017 African Governance and Development Institute WP/17/041 Forthcoming: Financial History Review. Available at SSRN: https://ssrn.com/abstract=3051653 or http://dx.doi.org/10.2139/ssrn.3051653

Oasis Kodila-Tedika

University of Kinshasa - Department of Economics ( email )

Kinshasa
Democratic Republic of the Congo

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Matthias M. Cinyabuguma

University of Maryland, Baltimore County (UMBC) - Department of Economics ( email )

1000 Hilltop Circle
Baltimore, MD 21250
United States

Vanessa S. Tchamyou

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

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