The roles of ICT and governance quality in the finance-growth nexus of developing countries: a dynamic GMM approach
In an era of rapid technological advancements and increasing demands for effective governance, understanding the drivers of economic growth is vital. In Sub-Saharan Africa (SSA), where economic growth is fragile and highly reliant on financial systems, the interplay between financial development (FD...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2025-12-01
|
| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2024.2448228 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1841560007228784640 |
|---|---|
| author | Ummar Faruk Saeed Rabiatu Kamil Ishmael Wiredu |
| author_facet | Ummar Faruk Saeed Rabiatu Kamil Ishmael Wiredu |
| author_sort | Ummar Faruk Saeed |
| collection | DOAJ |
| description | In an era of rapid technological advancements and increasing demands for effective governance, understanding the drivers of economic growth is vital. In Sub-Saharan Africa (SSA), where economic growth is fragile and highly reliant on financial systems, the interplay between financial development (FD) and economic growth (EG) is crucial. This study explores three core questions: (1) What is the direct relationship between financial development and economic growth in SSA? (2) How does ICT access mediate the financial development and economic growth nexus? (3) To what extent do governance structures moderate this relationship? Using panel data from 36 SSA countries spanning 1990 to 2022, the study applies robust methodologies including two-step system GMM, dynamic common correlated effects, IV-2SLS, and fixed effects models to address potential endogeneity concerns. Results reveal that financial development in the private sector and broad money supply significantly promote economic growth, while financial development in the financial sector negatively affects growth. ICT access amplifies the positive impact of financial development on economic growth, while effective governance structures further strengthen this relationship. These findings highlight the need for policies fostering private-sector financial development and maintaining broad money supply stability to stimulate growth. Policymakers should also prioritize expanding ICT access and enhancing governance standards to drive sustained economic growth in SSA. |
| format | Article |
| id | doaj-art-fd99d3e6684747c69b024f1cd9d6c317 |
| institution | Kabale University |
| issn | 2332-2039 |
| language | English |
| publishDate | 2025-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj-art-fd99d3e6684747c69b024f1cd9d6c3172025-01-05T07:57:06ZengTaylor & Francis GroupCogent Economics & Finance2332-20392025-12-0113110.1080/23322039.2024.2448228The roles of ICT and governance quality in the finance-growth nexus of developing countries: a dynamic GMM approachUmmar Faruk Saeed0Rabiatu Kamil1Ishmael Wiredu2School of Business and Law, University for Development Studies, Tamale, GhanaDepartment of Accounting Education, Akenten Appiah-Menka University of Skills Training and Entrepreneurial Development, Kumasi, GhanaSchool of Business and Law, University for Development Studies, Tamale, GhanaIn an era of rapid technological advancements and increasing demands for effective governance, understanding the drivers of economic growth is vital. In Sub-Saharan Africa (SSA), where economic growth is fragile and highly reliant on financial systems, the interplay between financial development (FD) and economic growth (EG) is crucial. This study explores three core questions: (1) What is the direct relationship between financial development and economic growth in SSA? (2) How does ICT access mediate the financial development and economic growth nexus? (3) To what extent do governance structures moderate this relationship? Using panel data from 36 SSA countries spanning 1990 to 2022, the study applies robust methodologies including two-step system GMM, dynamic common correlated effects, IV-2SLS, and fixed effects models to address potential endogeneity concerns. Results reveal that financial development in the private sector and broad money supply significantly promote economic growth, while financial development in the financial sector negatively affects growth. ICT access amplifies the positive impact of financial development on economic growth, while effective governance structures further strengthen this relationship. These findings highlight the need for policies fostering private-sector financial development and maintaining broad money supply stability to stimulate growth. Policymakers should also prioritize expanding ICT access and enhancing governance standards to drive sustained economic growth in SSA.https://www.tandfonline.com/doi/10.1080/23322039.2024.2448228Financial developmentICT accessgovernment qualityeconomic growthSub-Saharan AfricaFinance |
| spellingShingle | Ummar Faruk Saeed Rabiatu Kamil Ishmael Wiredu The roles of ICT and governance quality in the finance-growth nexus of developing countries: a dynamic GMM approach Cogent Economics & Finance Financial development ICT access government quality economic growth Sub-Saharan Africa Finance |
| title | The roles of ICT and governance quality in the finance-growth nexus of developing countries: a dynamic GMM approach |
| title_full | The roles of ICT and governance quality in the finance-growth nexus of developing countries: a dynamic GMM approach |
| title_fullStr | The roles of ICT and governance quality in the finance-growth nexus of developing countries: a dynamic GMM approach |
| title_full_unstemmed | The roles of ICT and governance quality in the finance-growth nexus of developing countries: a dynamic GMM approach |
| title_short | The roles of ICT and governance quality in the finance-growth nexus of developing countries: a dynamic GMM approach |
| title_sort | roles of ict and governance quality in the finance growth nexus of developing countries a dynamic gmm approach |
| topic | Financial development ICT access government quality economic growth Sub-Saharan Africa Finance |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2024.2448228 |
| work_keys_str_mv | AT ummarfaruksaeed therolesofictandgovernancequalityinthefinancegrowthnexusofdevelopingcountriesadynamicgmmapproach AT rabiatukamil therolesofictandgovernancequalityinthefinancegrowthnexusofdevelopingcountriesadynamicgmmapproach AT ishmaelwiredu therolesofictandgovernancequalityinthefinancegrowthnexusofdevelopingcountriesadynamicgmmapproach AT ummarfaruksaeed rolesofictandgovernancequalityinthefinancegrowthnexusofdevelopingcountriesadynamicgmmapproach AT rabiatukamil rolesofictandgovernancequalityinthefinancegrowthnexusofdevelopingcountriesadynamicgmmapproach AT ishmaelwiredu rolesofictandgovernancequalityinthefinancegrowthnexusofdevelopingcountriesadynamicgmmapproach |