Financial sector development convergence in africa: Evidence from bank-and market-based measures

Yakubu Awudu Sare, Eric Evans Osei Opoku, Muazu Ibrahim, Isaac Koomson

Research output: Journal PublicationArticlepeer-review

6 Citations (Scopus)


In this paper, we employ data from 46 African countries over the period 1980–2014 to examine financial sector development convergence, using bank-and market-based measures of financial development. Within the framework of the generalized method of moments (GMM), we present evidence that both the bank– and market–based financial sector development in Africa diverge over time. However, we find strong evidence of financial development divergence when using bank-based financial sector development indicators whereas this evidence is weaker for market-based indicators. Given the divergence in the level of finance, the gap between countries with underdeveloped and well–developed financial markets will continue to widen as financially less developed countries do not appear to catch-up with the financially more developed economies.

Original languageEnglish
Pages (from-to)166-175
Number of pages10
JournalEconomics and Business Letters
Issue number4
Publication statusPublished - Dec 2019
Externally publishedYes


  • Africa
  • Convergence
  • Divergence
  • Financial development

ASJC Scopus subject areas

  • General Economics,Econometrics and Finance
  • Business and International Management


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