ISSN 2394-5125
 

Research Article 


CAN FINANCIAL SECTOR DEVELOPMENT IMPROVE ECONOMIC GROWTH IN THE SADC REGION?

David Damiyano, Nirmala Dorasamy.

Abstract
Using Domestic credit to the Private Sector (DCPS) as an indicator of financial sector
development, the paper investigated the impact of financial sector development in stimulating economic growth
in the Southern Africa Development Community (SADC). The methodology adopted for the research was in the
form of a Cobb-Douglas production function that arguments the A-K growth theory. The model included the
following control variables: net effects of Trade, Education expenditure, Inflation, Government expenditure,
Gross fixed capital formation and Labour force. The Random effects regression analytical method was used to
estimate the results and as such the data analyzed showed of a significant negative relationship between
financial sector development and economic growth. The results are not in line with the findings of (Caporale et
al., 2009) and Allen and Ndikumana (1998) whose results show of a positive relationship. Thus,
recommendations to the policy makers in SADC is that attention should be given to financial development to
ensure that the economy has a relevant financial system that provides financial services that are vital for
stabilizing the economy and in the process promoting growth. This recommendation is brought about the fact
that close attention should be given on the level of economic development and the type of financial system that
is either bank based or market based as developing countries should have the bank based financial system.

Key words: financial sector, economic growth, domestic sector, private sector


 
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Pubmed Style

David Damiyano, Nirmala Dorasamy. CAN FINANCIAL SECTOR DEVELOPMENT IMPROVE ECONOMIC GROWTH IN THE SADC REGION?. JCR. 2020; 7(16): 2070-2088. doi:10.31838/jcr.07.16.264


Web Style

David Damiyano, Nirmala Dorasamy. CAN FINANCIAL SECTOR DEVELOPMENT IMPROVE ECONOMIC GROWTH IN THE SADC REGION?. http://www.jcreview.com/?mno=5430 [Access: June 03, 2021]. doi:10.31838/jcr.07.16.264


AMA (American Medical Association) Style

David Damiyano, Nirmala Dorasamy. CAN FINANCIAL SECTOR DEVELOPMENT IMPROVE ECONOMIC GROWTH IN THE SADC REGION?. JCR. 2020; 7(16): 2070-2088. doi:10.31838/jcr.07.16.264



Vancouver/ICMJE Style

David Damiyano, Nirmala Dorasamy. CAN FINANCIAL SECTOR DEVELOPMENT IMPROVE ECONOMIC GROWTH IN THE SADC REGION?. JCR. (2020), [cited June 03, 2021]; 7(16): 2070-2088. doi:10.31838/jcr.07.16.264



Harvard Style

David Damiyano, Nirmala Dorasamy (2020) CAN FINANCIAL SECTOR DEVELOPMENT IMPROVE ECONOMIC GROWTH IN THE SADC REGION?. JCR, 7 (16), 2070-2088. doi:10.31838/jcr.07.16.264



Turabian Style

David Damiyano, Nirmala Dorasamy. 2020. CAN FINANCIAL SECTOR DEVELOPMENT IMPROVE ECONOMIC GROWTH IN THE SADC REGION?. Journal of Critical Reviews, 7 (16), 2070-2088. doi:10.31838/jcr.07.16.264



Chicago Style

David Damiyano, Nirmala Dorasamy. "CAN FINANCIAL SECTOR DEVELOPMENT IMPROVE ECONOMIC GROWTH IN THE SADC REGION?." Journal of Critical Reviews 7 (2020), 2070-2088. doi:10.31838/jcr.07.16.264



MLA (The Modern Language Association) Style

David Damiyano, Nirmala Dorasamy. "CAN FINANCIAL SECTOR DEVELOPMENT IMPROVE ECONOMIC GROWTH IN THE SADC REGION?." Journal of Critical Reviews 7.16 (2020), 2070-2088. Print. doi:10.31838/jcr.07.16.264



APA (American Psychological Association) Style

David Damiyano, Nirmala Dorasamy (2020) CAN FINANCIAL SECTOR DEVELOPMENT IMPROVE ECONOMIC GROWTH IN THE SADC REGION?. Journal of Critical Reviews, 7 (16), 2070-2088. doi:10.31838/jcr.07.16.264