The role of international tourism, trade openness and renewable energy in the financial development of selected African countries
It is well established that financial development is pivotal to the proper functioning of the real economy and there is a vast body of literature investigating into its determinants. In this study, we shift attention to tourism and renewable energy consumption that are rarely discussed in the financ...
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| Format: | Article |
| Language: | English |
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Elsevier
2023-12-01
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| Series: | Research in Globalization |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2590051X23000606 |
| _version_ | 1827587929007980544 |
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| author | Solomon Aboagye Paul Adjei Kwakwa |
| author_facet | Solomon Aboagye Paul Adjei Kwakwa |
| author_sort | Solomon Aboagye |
| collection | DOAJ |
| description | It is well established that financial development is pivotal to the proper functioning of the real economy and there is a vast body of literature investigating into its determinants. In this study, we shift attention to tourism and renewable energy consumption that are rarely discussed in the financial development debate along with trade openness. Even though, tourism and renewable energy consumption may be less conventional to issues of financial intermediation, they could, along with trade openness, nonetheless contribute to some aspects of financial development in ways consistent with the finance-growth hypothesis. Consequently, this study, while controlling for economic growth, development assistance and government expenditure examines the effects of renewable energy consumption, tourism development and trade openness on financial development in selected African countries. The study relies on data from the World Bank (2023) World Development Indicators for seven African countries (Egypt, Tunisia, Kenya, South Africa, Zimbabwe, Ivory Coast and Morocco) over the periods 1995–2021. Fully Modified Ordinary Least Square (FMOLS) regression estimations reveal that, in the long run, trade openness, international tourism, and renewable energy stimulate financial development. The quantile regression which rendered additional support to this evidence further reveals that, the financial sector gains associated with trade openness, international tourism and renewable energy are greater for countries with lower financial sector development. Thus, a country can still optimize the gains associated with increased trade openness, international tourism, and renewable energy consumption with a relatively less developed financial market. Hence, polices that improve tourism development, promote renewable energy consumption and intensify economic openness may be important catalysts for stimulating further financial development in Africa. |
| first_indexed | 2024-03-09T00:25:04Z |
| format | Article |
| id | doaj.art-3aa4891ecf0e4b638285660ca62a4618 |
| institution | Directory Open Access Journal |
| issn | 2590-051X |
| language | English |
| last_indexed | 2024-03-09T00:25:04Z |
| publishDate | 2023-12-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Research in Globalization |
| spelling | doaj.art-3aa4891ecf0e4b638285660ca62a46182023-12-12T04:35:32ZengElsevierResearch in Globalization2590-051X2023-12-017100170The role of international tourism, trade openness and renewable energy in the financial development of selected African countriesSolomon Aboagye0Paul Adjei Kwakwa1Lancaster University, Ghana; Corresponding author.School of Arts and Social Sciences, University of Energy and Natural Resources, Sunyani, Ghana; URD Research Center, University of Religions and Denominations, Qom, IranIt is well established that financial development is pivotal to the proper functioning of the real economy and there is a vast body of literature investigating into its determinants. In this study, we shift attention to tourism and renewable energy consumption that are rarely discussed in the financial development debate along with trade openness. Even though, tourism and renewable energy consumption may be less conventional to issues of financial intermediation, they could, along with trade openness, nonetheless contribute to some aspects of financial development in ways consistent with the finance-growth hypothesis. Consequently, this study, while controlling for economic growth, development assistance and government expenditure examines the effects of renewable energy consumption, tourism development and trade openness on financial development in selected African countries. The study relies on data from the World Bank (2023) World Development Indicators for seven African countries (Egypt, Tunisia, Kenya, South Africa, Zimbabwe, Ivory Coast and Morocco) over the periods 1995–2021. Fully Modified Ordinary Least Square (FMOLS) regression estimations reveal that, in the long run, trade openness, international tourism, and renewable energy stimulate financial development. The quantile regression which rendered additional support to this evidence further reveals that, the financial sector gains associated with trade openness, international tourism and renewable energy are greater for countries with lower financial sector development. Thus, a country can still optimize the gains associated with increased trade openness, international tourism, and renewable energy consumption with a relatively less developed financial market. Hence, polices that improve tourism development, promote renewable energy consumption and intensify economic openness may be important catalysts for stimulating further financial development in Africa.http://www.sciencedirect.com/science/article/pii/S2590051X23000606Financial developmentRenewable energyTourismTrade opennessFinancial markets |
| spellingShingle | Solomon Aboagye Paul Adjei Kwakwa The role of international tourism, trade openness and renewable energy in the financial development of selected African countries Research in Globalization Financial development Renewable energy Tourism Trade openness Financial markets |
| title | The role of international tourism, trade openness and renewable energy in the financial development of selected African countries |
| title_full | The role of international tourism, trade openness and renewable energy in the financial development of selected African countries |
| title_fullStr | The role of international tourism, trade openness and renewable energy in the financial development of selected African countries |
| title_full_unstemmed | The role of international tourism, trade openness and renewable energy in the financial development of selected African countries |
| title_short | The role of international tourism, trade openness and renewable energy in the financial development of selected African countries |
| title_sort | role of international tourism trade openness and renewable energy in the financial development of selected african countries |
| topic | Financial development Renewable energy Tourism Trade openness Financial markets |
| url | http://www.sciencedirect.com/science/article/pii/S2590051X23000606 |
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