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Economic Change and Restructuring
Published in: Economic Change and Restructuring 1/2019

18-07-2017

Human capital, financial sector development and inclusive growth in sub-Saharan Africa

Authors: Mutiu Abimbola Oyinlola, Abdulfatai Adedeji

Published in: Economic Change and Restructuring | Issue 1/2019

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Abstract

This paper examines the role of financial development in the human capital-growth relationship. The core activity of this study involves the use of different measures of human capital (school enrolment and total factor productivity) in the examination of its impact on inclusive growth and interrogating how financial sector serves as catalyst in this process. We explore the system generalized method of moments estimation technique to examine this relationship in 19 sub-Saharan African countries between 1999 and 2014. The findings show indications of largely positive direct impact of both human capital and financial development on inclusive growth. The results also show that financial development promotes the extent to which human capital can facilitate inclusive growth, however the choice of measures of both human capital and financial development are important in examining their complemental influence on inclusive growth. Thus, enhancing the efficiency of the financial sector through reforms would have greater spillover effect on human capital development thereby promoting growth inclusiveness.
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Appendix
Available only for authorised users
Footnotes
1
See, Ali and Son (2007) and Raheem et al. (2016) for details.
 
2
See, Esso (2012).
 
3
The results somehow, tend to support the narrative that, in addition to many other important factors, the performance and long-term economic growth and welfare of a country are related to its degree of financial development. The higher the degree of financial development, the wider the availability of financial services that allows the diversification of risk. Such diversification, in turn, increases the long-term growth trajectory of a country and ultimately improves the welfare and prosperity of producers and consumers that have access to financial services (See The Financial Development Report, 2012 by World Economic Forum, Switzerland).
 
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Metadata
Title
Human capital, financial sector development and inclusive growth in sub-Saharan Africa
Authors
Mutiu Abimbola Oyinlola
Abdulfatai Adedeji
Publication date
18-07-2017
Publisher
Springer US
Published in
Economic Change and Restructuring / Issue 1/2019
Print ISSN: 1573-9414
Electronic ISSN: 1574-0277
DOI
https://doi.org/10.1007/s10644-017-9217-2

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