Financial Structure and Economic Growth: Evidence from Sub-Saharan Africa

This study examines the effect of financial structure on economic growth in Sub Saharan Africa. The sample consists of both low and middle income countries, whose financial systems range from poorly developed to relatively well- developed in the context of developing countries. Using dynamic panel estimation techniques, the study investigates both the short and long-run effects of financial structure on growth, focusing on 14 SSA countries over the period 1980-2014. The results indicate that financial structure is not significant in explaining growth in the region. The study is robust to sample groupings, and the results do not change when we exclude countries with better developed financial systems relative to other countries in the sample.