Short-Versus Long-Term Credit and Economic Performance : Evidence from the WAEMU / Kodzo Gbenyo, Kangni Kpodar.

Format:

Book

Government document

Author/Creator:

Gbenyo, Kodzo.

Contributor:

Kpodar, Kangni.

International Monetary Fund. African Department.

Series:

IMF Working Papers; Working Paper ; No. 2010/115

IMF Working Papers

Language:

English

Subjects (All):

Union économique et monétaire ouest africaine.

Economic development--Africa, West.

Economic development.

Fiscal policy--Africa, West.

Fiscal policy.

Africa, West--Economic conditions.

Africa, West.

Physical Description:

1 online resource (47 p.)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2010.

Language Note:

English

Summary:

This paper studies the link between financial development and economic growth in the West African Economic and Monetary Union (WAEMU). Using panel data for WAEMU countries over the period 1995-2006, the results suggest that while financial development does support growth in the region, long-term bank financing has a greater impact on economic growth than short-term financing because long-term projects have higher returns adjusted for risks. Given that in the WAEMU short-term credit accounts for about 70 percent of credit to the private sector, WAEMU countries are less able to reap the full benefits of improvements in their financial systems. The results also highlight the importance of macroeconomic stability, a creditor-friendly environment, political stability, and the availability of long-term financial resources in fostering banks’ supply of long-term loans.

Contents:

Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Theoretical Background; III. Stylized Facts; 1. WAEMU: Financial Development and Economic Growth, 1989-2006; 2. WAEMU: Share of Short-Term Credit in Total Credit and Economic Growth, 1995-2006; IV. Empirical Estimations; A. Models and Data; B. Methodology and Results; 1. WAEMU: Impact of Short and Long-Term Credit and Economic Growth; 2. WAEMU: Impact of Short- and Long-Term Credit on Economic Growth, System GMM Estimates; 3. WAEMU: Impact of Short- and Long-Term Credit on Economic Growth-A Panel Cointegration Approach

4. WAEMU: Determinants of the Share of Long-Term Credit in Total CreditV. Conclusion and Policy Recommendations; 1. Panel Unit Root and Cointegration Tests; A1. WAEMU: Selected Financial Soundness Indicators, 1995-2006; A2. WAEMU: Trend in Private Credit over GDP, 1989-2006; A3. WAEMU: Short and Long-Term Credit as a Share of Total Credit, 1989-2006; A4. WAEMU: Sectoral Shares in GDP and Credit to Private Sector; 2. Summary Statistics and Correlation Matrices; 3. Variable Definition and Sources; References; Footnotes

Notes:

"May 2010."

At head of title: African Department.

Includes bibliographical references (p. 20-21).

Description based on print version record.

ISBN:

9786613874917

9781462321438

1462321437

9781452725826

1452725829

9781283562461

1283562464

9781455200214

1455200212

OCLC:

867927129