Next Article in Journal / Special Issue
Put–Call Ratio Volume vs. Open Interest in Predicting Market Return: A Frequency Domain Rolling Causality Analysis
Previous Article in Journal
The Public Choice of Public Stadium Financing: Evidence from San Diego Referenda
Previous Article in Special Issue
Market Efficiency and News Dynamics: Evidence from International Equity Markets
Open AccessArticle

Influence of Real Exchange Rate on the Finance-Growth Nexus in the West African Region

1
School of Finance and Economics, Taylor’s University, Selangor 47500, Malaysia
2
Economics Program, School of Social Sciences, Universiti Sains Malaysia, Penang 11800, Malaysia
*
Author to whom correspondence should be addressed.
Economies 2019, 7(1), 23; https://doi.org/10.3390/economies7010023
Received: 10 January 2019 / Revised: 15 March 2019 / Accepted: 18 March 2019 / Published: 25 March 2019
(This article belongs to the Special Issue Efficiency and Anomalies in Stock Markets)
This study examines the moderating effects of the real exchange rate and its volatility on the finance-growth nexus in the West African region. It also determines the marginal effects of financial development on economic growth at various levels of the real exchange rates and its volatility. The findings show that financial development has a long-term positive impact on economic growth, but this impact is weakened by real exchange rate and its volatility. The marginal effects of financial development on economic growth vary with the levels of the real exchange rate and its volatility. The higher the real exchange rate and its volatility, the less finance spurs growth. We also provide evidence of this scenario in individual specific countries in the region. The implication of this study is that the development of the financial sector would not provide the desirable economic benefits except it is accompanied by a reduction and stability in the real exchange rates. Based on the findings, the study makes some policy recommendations. View Full-Text
Keywords: real exchange rate; volatility; financial development; economic growth real exchange rate; volatility; financial development; economic growth
Show Figures

Figure 1

MDPI and ACS Style

Ehigiamusoe, K.U.; Lean, H.H. Influence of Real Exchange Rate on the Finance-Growth Nexus in the West African Region. Economies 2019, 7, 23.

Show more citation formats Show less citations formats
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Article Access Map by Country/Region

1
Back to TopTop