Financial Access and Value Added in Sub-Saharan Africa: Empirical Evidence from the Agricultural, Manufacturing and Service Sectors

Simplice Asongu and Nicholas Odhiambo

MPRA Paper from University Library of Munich, Germany

Abstract: This research assesses the importance of financial access on value added in three economic sectors in 25 countries in Sub-Saharan Africa using data for the period 1980-2014. The empirical evidence is based on the Generalised Method of Moments. Financial access is measured with private domestic credit, while the three outcome variables are: value added in the agricultural, manufacturing, and service sectors, respectively. Enhancing financial access does not significantly improve value added in the agricultural and manufacturing sectors, while enhancing financial access improves value added in the service sector.An extended analysis shows that in order for the positive net incidence of enhancing credit access on value added to the service sector to be maintained, complementary policies are required when domestic credit to the private sector is between 77.50% and 98.50% of GDP. Policy implications are discussed.

Keywords: Economic Output; Financial Development; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: E23 F21 F30 O16 O55 (search for similar items in EconPapers)
Date: 2022-01
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Related works:
Working Paper: Financial Access and Value Added in Sub-Saharan Africa: Empirical Evidence from the Agricultural, Manufacturing and Service Sectors (2022)
Working Paper: Financial Access and Value Added in Sub-Saharan Africa: Empirical Evidence from the Agricultural, Manufacturing and Service Sectors (2022)
Working Paper: Financial access and value added in Sub-Saharan Africa: Empirical evidence from the agricultural manufacturing and service sectors (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:119056

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