FACULTY OF THE SOCIAL SCIENCES

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    Financial System Development and Economic Growth in Sub-Saharan Africa
    (West African Institue of Financial Economic Managemnt, 2016) Egwaikhide, F. O.; Oyinlola, M.A.; Omisakin, O.; Adeniyi, O. A.
    This paper contributes to the age-old debate on the link between financial development and economic growth by examining the role of monetary policy. There is a possibility that monetary policy enhances financial system performance with attendant impact on growth. To unveil this influence, this paper employs fixed effects and System GMM on data from 28 sub-Saharan African countries over the period 1996 to 2014. Results from the baseline estimation using fixed effects indicate that financial development indicators are negatively and significantly associated with growth for two of the three measures used (LGDP and PGDP), while money growth is positively related albeit insignificantly. The results largely remain the same on interaction with money growth. The coefficients of the interactive terms though largely negative are, however, not significant. The results from System GMM presents a different outcome. First, all measures of financial development turn out positive (except BBD) and insignificant. Financial development equally turns negative but insignificant after interacting with money growth. Overall, monetary policy measures, together with their interactions with financial development indicators, show up as weak growth predictors if not dampening, suggestive of the plausible independence of the nexus on the actions of monetary authorities in these countries.
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    Foreign Capital Flows, Financial Development and Growth in Sub-Saharan Africa
    (Emerald Publishing Limited, 2015) Adeniyi, O. A.; Ajide, B.; Salisu, A.
    This paper investigated how financial development influences the relationship between foreign direct investment (FDI) and economic growth in selected Sub-Saharan Africa (SSA) countries. This study considered three alternative measures of financial development (FD) and their impacts on the FDI-growth linkage. It also explored the possibility of nonlinearities in the tripartite relationships. The results showed a positive influence of FDI on economic growth. Financial system development also had growth-promoting impact in the presence of FDI flows. Interestingly, these findings remained robust when potential endogeneity was accounted for using a well known instrumental variable (IV) estimator. Digging deeper, the findings also supported the existence of non-linearities in the role of FD in the FDI-growth association. In policy terms, these SSA countries will reap more growth benefits from foreign capital flows especially if financial reforms are sustained.
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    Public Debt, Tax and Economic Growth in Sub-Saharan African Countries
    (Springer Nature, 2023) Adedeji, A. A.; Oyinlola, M. A.; Adeniyi, O. A.
    This study examines the effect of public debt on the relationship between tax and economic growth in sub-Saharan African countries. Grounded in the extended endogenous growth model, it employs a dynamic fixed-effects model to explore both linear and nonlinear relationships. For the full sample, the linear analysis demonstrates that tax measures contribute positively to economic growth regardless of public debt inclusion. Intriguingly, while public debt on its own has a detrimental effect on growth, its interaction with total taxes exhibits a positive influence. Conversely, the nonlinear approach reveals a negative association between public debt and growth. Moreover, the interaction term indicates that public debt weakly supports the impact of indirect taxes on economic growth while undermining the effectiveness of taxes on goods and services. However, the interactions between public debt and other tax measures are not statistically significant. When considering various country classifications based on income level, fragility, and resource endowment under the linear approach, the study uncovers that several tax measures have a positive and statistically significant direct impact on growth. Furthermore, in low-income countries, public debt has a weaker effect on economic growth compared to that in middle-income countries. Public debt tends to reduce the effectiveness of direct taxes and taxes on income, profits, and capital gains in low-income countries. Conversely, public debt enhances only the effectiveness of indirect taxes in driving economic growth in middle-income countries. Under the nonlinear approach, mixed results are observed. Specifically, public debt predominantly undermines the effectiveness of most tax measures in middle-income countries. The findings across other country classifications also reveal diverse effects of public debt on the tax–growth relationship.
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    Does Tourism Reduce Poverty in Sub-Saharan African Countries?
    (SAGE Publications, 2020) Folarin, O.; Adeniyi, O.A.
    To achieve the Sustainable Development Goals (SDGs), precisely the one of eradicating extreme poverty at the end of 2030, it is important to understand factors that can reduce poverty. This article examines the effects of tourism development on poverty in Sub-Saharan African countries. Because of the possibility of an endogeneity problem arising from a reverse causation that might exist between poverty and the explanatory variables, the system Generalized Method of Moments (system GMM) estimation technique was deployed. The findings showed that tourism development contributes to poverty reduction in Sub-Saharan African (SSA) countries. In other words, the results obtained provided ample support for the workability of a pro-poor tourism policy agenda. As a result, policies that are targeted at increasing the attractiveness and awareness of the existing SSA tourism sites in order to increase international tourism receipts and arrivals should be promoted since such interventions have considerable poverty reduction potential.
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    Financial System Development and Economic Growth in Sub-Saharan Africa
    (West African Institue of Financial Economic Managemnt, 2016) Egwaikhide, F. O.; Oyinlola, M. A.; Omisakin, O.; Adeniyi, O. A.
    This paper contributes to the age-old debate on the link between financial development and economic growth by examining the role of monetary policy. There is a possibility that monetary policy enhances financial system performance with attendant impact on growth. To unveil this influence, this paper employs fixed effects and System GMM on data from 28 sub-Saharan African countries over the period 1996 to 2014. Results from the baseline estimation using fixed effects indicate that financial development indicators are negatively and significantly associated with growth for two of the three measures used (LGDP and PGDP), while money growth is positively related albeit insignificantly. The results largely remain the same on interaction with money growth. The coefficients of the interactive terms though largely negative are, however, not significant. The results from System GMM presents a different outcome. First, all measures of financial development turn out positive (except BBD) and insignificant. Financial development equally turns negative but insignificant after interacting with money growth. Overall, monetary policy measures, together with their interactions with financial development indicators, show up as weak growth predictors if not dampening, suggestive of the plausible independence of the nexus on the actions of monetary authorities in these countries.
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    Financial System Development and Economic Growth in Sub-Saharan Africa
    (West African Institue of Financial Economic Managemnt, 2016) Egwaikhide, F. O.; Oyinlola, M. A.; Omisakin, O.; Adeniyi, O. A
    This paper contributes to the age-old debate on the link between financial development and economic growth by examining the role of monetary policy. There is a possibility that monetary policy enhances financial system performance with attendant impact on growth. To unveil this influence, this paper employs fixed effects and System GMM on data from 28 sub-Saharan African countries over the period 1996 to 2014. Results from the baseline estimation using fixed effects indicate that financial development indicators are negatively and significantly associated with growth for two of the three measures used (LGDP and PGDP), while money growth is positively related albeit insignificantly. The results largely remain the same on interaction with money growth. The coefficients of the interactive terms though largely negative are, however, not significant. The results from System GMM presents a different outcome. First, all measures of financial development turn out positive (except BBD) and insignificant. Financial development equally turns negative but insignificant after interacting with money growth. Overall, monetary policy measures, together with their interactions with financial development indicators, show up as weak growth predictors if not dampening, suggestive of the plausible independence of the nexus on the actions of monetary authorities in these countries.
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    Foreign Capital Flows, Financial Development and Growth in Sub-Saharan Africa
    (Emerald Publishing Limited, 2015) Adeniyi, O. A.; Ajide, B.; Salisu, A.
    This paper investigated how financial development influences the relationship between foreign direct investment (FDI) and economic growth in selected Sub-Saharan Africa (SSA) countries. This study considered three alternative measures of financial development (FD) and their impacts on the FDI-growth linkage. It also explored the possibility of nonlinearities in the tripartite relationships. The results showed a positive influence of FDI on economic growth. Financial system development also had growth-promoting impact in the presence of FDI flows. Interestingly, these findings remained robust when potential endogeneity was accounted for using a well known instrumental variable (IV) estimator. Digging deeper, the findings also supported the existence of non-linearities in the role of FD in the FDI-growth association. In policy terms, these SSA countries will reap more growth benefits from foreign capital flows especially if financial reforms are sustained.
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    Foreign Capital Flows, Financial Development and Growth in Sub-Saharan Africa
    (Emerald Publishing Limited, 2015) Adeniyi, O. A.; Ajide, B.; Salisu, A.
    This paper investigated how financial development influences the relationship between foreign direct investment (FDI) and economic growth in selected Sub-Saharan Africa (SSA) countries. This study considered three alternative measures of financial development (FD) and their impacts on the FDI-growth linkage. It also explored the possibility of nonlinearities in the tripartite relationships. The results showed a positive influence of FDI on economic growth. Financial system development also had growth-promoting impact in the presence of FDI flows. Interestingly, these findings remained robust when potential endogeneity was accounted for using a well known instrumental variable (IV) estimator. Digging deeper, the findings also supported the existence of non-linearities in the role of FD in the FDI-growth association. In policy terms, these SSA countries will reap more growth benefits from foreign capital flows especially if financial reforms are sustained.
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    Does Governance Impact on the Foreign Direct Investment-Growth Nexus in Sub-Saharan Africa?
    (Economics Faculty Zagreb, 2014) Ajide, K.; Adeniyi, O. A.; Raheem, I. D.
    The central question this paper sought to tackle was “does the quality of institutions matter for the relationship between Foreign Direct Investment (FDI) and economic growth?” Using macroeconomic data on 27 Sub Saharan African (SSA) economies and six distinct measures of governance the findings showed that control of corruption, political stability and government effectiveness matter for the influence of FDI on economic growth in SSA. This key finding was found to be robust even in models where these three governance indicators were interacted with FDI. Furthermore, the results from threshold-type sample splitting showed that in the sample containing countries with a higher level of governance, the positive impact of FDI on growth has larger magnitude vis-à-vis the comparator group with poorer governance indicators. This significant threshold effects remained robust across specifications
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    Energy Consumption and Financial Development in Sub-Saharan Africa: A Panel Econometric Analysis
    (Inderscience Enterprises LTD, 2013) Ajide. K.; Bekoe, W.; Yaqub, J.; Adeniyi, O. A.
    This paper investigated the energy consumption-financial development linkage for Sub-Saharan Africa (SSA). Annual data for 26 countries spanning the period 1996 to 2009 was used to elicit answers on the questions of interest. This is the first attempt, as far as we are aware, at examining the linkage between shocks to and response of the energy and financial markets of SSA economies. Recent panel causality techniques are deployed to probe causal orderings both in the short- and long-run. The results suggest that regardless of the financial development measure, there is weak evidence for short-run causality. Contrariwise, there appears to be ample evidence in support of long-run causality particularly flowing from private sector credit as a share of GDP to total energy consumption. For electricity consumption, there is short-run and long-run causality from private sector credit to GDP ratio. In sum, these plausibly imply that a deeper financial system effectively allocates resources to the private sector enabling a scaling up in operations and by extension higher energy requirements.