Trade openness and financial development in <scp>sub‐Saharan</scp> Africa: The role of institutional structures
Mac Junior Abeka, John Gartchie Gatsi, Michael Owusu Appiah, Otuo Serebour Agyemang
Abstract
Abstract This article examines the role of institutional structures in the relationship between trade openness and financial development in sub‐Saharan economies. The study is based on empirical data from sampled sub‐Saharan African countries for a period of 1996–2017. The system generalized method of moment was employed to estimate the models. The findings suggest that, even though trade openness has a positive significant influence on the level of financial development in sub‐Saharan African economies, this relationship is enhanced through the presence of good institutions in these economies. Thus, for these economies to realize the full benefit of the effect of trade openness on financial development, they need to strengthen their institutions.