本文是一篇金融管理论文，本研究采用动态面板数据技术，运用广义矩量法估计chosen模型的参数，从方程（4）得到的结果表明，金融发展对经济增长具有负向影响。然而，动态面板模型的结果表明叐┺ 在方程（5）中，分别为阴性和阳性，且均具有统计学意义，呈U形。
Chapter One Introduction
1.1 Background and Significance
1.1.1 Background
The financial system in Africa is not robust and might not stand the test of time. Anunsound financial system usually results in financial crisis, which inherently has negativeconsequences for growth. An example can be made of the financial crisis which happenedin the USA which did not only affect the economic growth of USA but had a negativespill over effect in some Asian and European economies. As posited by Sundararajan,Balino, Bali o, and Bali o (1991), views crisis in the financial sector as a state whereby anumber of financial institutions have huge debt which they are unable to payback as itoutweighs the market value of their assets, the fall down of some financial institutions andgovernment involvement to intercede in the such events. There is high level of exchangerate problems and interest rates which discourages investment decisions. In such events,non-performance of loans are always on the rise as the economic conditions becomeunfavourable, thus create problems for the financial sector.
Cheang (2004) stressed that, the existence of financial stability in an economy is thefirst priority investors, specifically foreign investors look at before they enter thedomestic market of a country to establish business. When foreign businesses areestablished, there is usually enough inflow of foreign capital which can lead to moreeconomic activities and increase demand in labour. To establish a strong financial system,countries in Africa have undergone several finance reforms with the aim of strengtheningthe finance system in the past and in the present times. Believed to be a significant portionof macroeconomic policy, the finance sector reforms are supposed to augment importanteconomic merits, specifically by means of a more potent and efficient saving mobilizationinternally and an enhanced way of earmarking funds Khan, Qayyum, Sheikh, andSiddique (2005). Although, critical efforts have been made by African countries, theseefforts have been inadequate as the financial system is still weak which is evidenced inmany of the countries in Africa continent.
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1.2 Organization of the Study
The study is in six chapters. This first chapter discusses the background of the study,statement of the problem, objectives, research questions, justification of the study,significance of the study and scope and limitations. The second chapter will deal with thereview of relevant literature: both theoretical and empirical. The third chapter will dealwith the financial sector and economic growth in Sub-Saharan Africa. Chapter fourdiscusses the research methodology. Chapter five will deal with the estimation anddiscussion of results of the study and the last chapter (chapter six) is dedicated tosumming up and concluding the results of the study and recommendations for policyimplementation.
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Chapter Two Literature Review
2.1 Theoretical Literature
Diverse opinions are held by economists concerning the role of the financial system inpromoting economic growth. Hicks (1969) observed that, the development of the financesector played an important industrialization role in England. Studies on the relationshipbetween financial development and economic growth can be traced to Schumpeter (1911)who performed a critical research on the principal role of financial services in innovationand development. The role played by financial institutions are highly important as thereimprove the growth and development of the economy through recognising and makingmoney available for productive investments. Ahmed (2006) the financial sector plays acritical role in channelling funds from savers to investors. Thus the sector plays animportant role in wealth accumulation, trade and capital formation.
There are four views regarding financial dev
