Generalised Methods of Moments

Financial Reforms and the Finance – Growth Relationship in the Southern African Development Community (SADC)

This study seeks to establish the casual relationship between financial development and economic growth in the SADC region, factoring-in the role of financial reforms. Utilising Generalised Methods of Moments (GMM) and Panel Fixed Effects estimations, the study established that financial development has a negative effect on growth in SADC. Underdeveloped financial systems, structure and distribution of credit in the SADC countries and strong country heterogeneity factors are possible explanations to the relationship obtained.
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