Representaciones sobre la maternidad y el hijo imaginario durante el embarazo

The first paper reviewed in this regard is Barajas, et al. (2016), which covered 150 countries, including Egypt, Nigeria and South Africa. The study used credit to the private sector and stock market turnover as a measure of financial development in order to establish if the impact of financial deepening on economic growth differs across regions, income levels and types of economy. The study covered the period 1975 to 2007, and employed the dynamic panel estimation technique. The study concluded that the effect of financial deepening on economic growth displayed heterogeneity across countries and types of economy. In this respect, the study found that the influence of financial deepening on economic growth is smaller in oil- exporting countries, low-income regions and certain regions such as the Middle East and North Africa (MENA).

51 The small effect of financial development on economic growth in oil-exporting countries was attributed to the natural resource curse effects. Barajas, et al. (2016) found that the benefit of financial development falls continually as the degree of oil dependence increases. As a result of the natural resource curse, the researchers concluded that banks in oil-exporting countries are ineffective in generating productive capacity of the economy outside the oil sector (Barajas, et al., 2016: 24). In low-income countries, Barajas, et al. (2016) found that the weak effect of financial development on economic growth could be attributed to shallow financial markets and institutions, coupled with lack of access to financial services.

In the MENA region, the researchers concluded that the weak link between financial development and economic growth is due to the “quality gap” arising from a disproportionately lower level of access to financial services, given the level of financial development prevailing in that region (Barajas, et al., 2016: 33). In addition, it was concluded that the low effect of financial development on economic growth in oil-exporting countries, low-income countries and the MENA region is likely to emanate from the supply-side constraints, that is, the functioning of banks and the regulatory environment.

The next cross-country study reviewed in this section of the thesis was Beck, et al. (2014), which covered 77 countries, including Egypt and South Africa. The study used data covering the period 1980-2007, and employed an OLS regression technique. The objective of the study was to measure the impact of the size of the financial system and intermediation role on economic growth and its volatility. The size of the financial system was proxied by value added by the manufacturing system, while intermediation was measured by bank credit to the private sector. The results showed that in the long run, financial intermediation increases economic growth and reduces its volatility. There was no evidence to suggest that the size of the financial system promotes economic growth and reduces its volatility. The researchers conceded that they did not address issues of endogeneity, and omitted variables biases, issues which can be a tackled in future research.

Demetriades and Rousseau (2015) employed the panel OLS technique to investigate if the link between financial development and economic growth is changing. They used data for 84 countries over the period 1975-2004. The period of study was also divided into two additional sub-periods, 1975-1989 and 1990-2004. Egypt, Nigeria and South Africa were also included in that sample. Financial development is proxied by narrow money, that is M3 less M1. Demetriades and Rousseau (2015) argued that using the narrow definition of money would

52 isolate the intensity of financial intermediation because it removes the transactional component of liquid liabilities. The study introduced financial liberalisation into the model in order to establish if liberalisation had an influence on the finance-growth relationship.

The results from Demetriades and Rousseau (2015) showed that during the period 1975-1989, financial development increased economic growth. However, this was not so in the period 1990-2004. In fact, they found that in the period 1990-2004, financial liberalisation was more significant in economic growth than financial development, concluding that what matters is how well regulated a financial system is. In that regard, they found that liberalising credit allocation, for instance, will result in substantially higher economic growth, only when the banking system is well regulated and supervised (Demetriades & Rousseau, 2015: 6).

Another recent study investigating the finance-growth link using data from countries in different regions was Gambacorta, et al. (2014). The study was based on data from 41 developing and emerging countries, covering the period 1990-2011. Egypt and South Africa were included in the sample of countries studied. Financial development was measured by bank credit to the private sector and stock market turnover. The study employed two estimation techniques, that is, OLS and quadratic estimation.

In their study, Gambacorta, et al. (2014) showed that stock market turnover is positively and sigificantly associated with economic growth. In respect of bank development, the results showed that higher levels of bank credit to the private sector are not associated with higher economic growth. However, the quadratic estimation results showed that both banks and stock markets are associated with higher economic growth only up to a certain point (Gambacorta, et al., 2014: 29). The study also found that both stock market and bank variables were significant in the regression, suggesting that they carry out different roles which are all important for economic growth. In addition, the study found that the influence of bank development is stronger in low-income than in high-income countries, implying that at early stages of development in a particular country, the development of banks rather than stock markets is more beneficial to economic growth.

Another cross-country study which included some African countries is Law and Singh (2014). Egypt and Nigeria were included, and data used in the study covered the period 1980-2010. The study employed the dynamic panel GMM methodology in order to investigate the threshold effects of financial development on economic growth. Bank credit, domestic credit and liquid liabilities (deposits) were used as measures of financial development. The results

53 from the study show that financial development below the threshold will exert a positive influence on economic growth. However, beyond a certain threshold, further financial development will have a negative impact on economic growth. The study suggested that the threshold beyond which financial development becomes a drag on economic growth for private sector credit, liquid liabilities and domestic credit is 94%, 97% and 100% respectively.

As presented above, while all the studies reinforce the assertion that finance fosters economic growth in line with the reviews by Levine (2004) and Demirgüç-Kunt & Levine (2009), they also illuminate that the level of income and financial development of the countries in the sample, and the measures of financial development, influence the nature of the results obtained therefrom.

These differences, given the heterogeneity of countries regarding economic growth and financial development, makes it difficult to draw policy suggestions based on these cross- country results. Secondly, using different measures of financial development suggests that the channels through which financial development influences economic growth to be tested in each study varies. These different approaches, therefore, make comparability and generalisation of such results difficult.

Lastly, given that there are the hypotheses in respect of the relationship between financial development and economic growth, the econometric method used should have the capability of investigating such hypotheses (Berthelemy & Varoudakis, 1996; Patrick, 1966). However, the majority of panel econometric techniques used in cross-country studies reviewed above do not provide for testing for endogeneity to test the three hypotheses. It is, therefore, the objective of this study to contribute to providing policy recommendations based on country-specific studies. This will help overcome challenges of generalisation (averaging) of findings and the dominant country effect. Also, the econometric method employed provides for testing endogeneity to understand the three potential relationships that may exist between financial development and economic growth.

In the next section we provide a review of previous country-specific time series studies in Egypt, Nigeria and South Africa. These are studies that attempted to improve on the weaknesses of cross-country studies which employ panel regression techniques. This approach will provide this thesis with an opportunity to improve on such previous studies in these countries to derive more robust policy conclusions.

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