THE EFFECT OF FLOW OF FUNDS UNCERTAINTY ON FINANCIAL DEVELOPMENT IN SOME SELECTED AFRICAN COUNTRIES

Abstract

The purpose of this paper is to analyze the effects of financial globalisation uncertainty on financial development, included in the model are foreign direct investment and economic growth as control variables to avoid the misspecification of variables. This paper analyzed the effects based on the panel data analysis using the Westerlund cointegration method, Pooled Mean Group estimator and Dumitrescu and Hurlin causality test of eight top African economies, from 1970-2018. The result of the co-integration showed a long-run relationship between the variables with and without structural breaks. Also, there exists a bidirectional causality relationship between financial development and financial globalisation uncertainty.