The Effect of Financial Deepening on Economic Growth in the East African Community

Finance & Economics Review

View Publication Info
 
 
Field Value
 
Title The Effect of Financial Deepening on Economic Growth in the East African Community
 
Creator Wanjala, Kevin
Gogo, Pamella
 
Subject Financial deepening, Economic growth, Broad money, Credit to the private sector, Volume of traded stock, East Africa
 
Description Purpose: The study’s objective is to determine the effect of financial deepening on the economic growth of the East Africa Community bloc. Specifically, it aims to establish the effect of the rate of broad money, credit to the private sector, and the rate of value of the traded stock on economic growth.
Methodology: The study used descriptive research design and employed the fixed effect model in regression analysis. Broad money was used to proxy the rate of money supply, credit to the private sector was used to represent credit financing while the volume of the traded stock was used as a measure for financial market investment. 
Results:  The findings revealed that all three indicators of financial deepening namely, broad money, credit to the private sector, and volume of traded stock had a positive and significant effect on economic growth in East Africa Community. The coefficient for broad money was 0.4410, the coefficient for credit to the private sector was 0.4022, while the coefficient for the volume of the traded stock was 0.1367. The model had an F statistic of 103.50, confirming its suitability. 
Implications: The study recommends that the East Africa Community governments should place more emphasis on the efficiency and of money supply, investment, and distribution by commercial banks. The study also recommends that the governments of East Africa Community countries should continue pursuing policies that promote access to credit such as ensuring that interest rates are low. Additionally, the capital market authorities of the East Africa Community countries should conduct sensitization campaigns to promote high participation in the stock market and other capital market products.
 
Publisher Research & Innovation Initiative
 
Date 2020-08-26
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://riiopenjournals.com/index.php/finance-economics-review/article/view/121
10.38157/finance-economics-review.v2i2.121
 
Source Finance & Economics Review; Vol 2 No 2 (2020): Finance & Economics Review; 55-73
2690-4063
10.38157/finance-economics-review.v2i2
 
Language eng
 
Relation https://riiopenjournals.com/index.php/finance-economics-review/article/view/121/64
 
Rights Copyright (c) 2020 Kevin Wanjala, Pamella Gogo
http://creativecommons.org/licenses/by-nc-nd/4.0
 

Contact Us

The PKP Index is an initiative of the Public Knowledge Project.

For PKP Publishing Services please use the PKP|PS contact form.

For support with PKP software we encourage users to consult our wiki for documentation and search our support forums.

For any other correspondence feel free to contact us using the PKP contact form.

Find Us

Twitter

Copyright © 2015-2018 Simon Fraser University Library