Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123612
Authors: 
Asongu, Simplice A.
Year of Publication: 
2014
Series/Report no.: 
AGDI Working Paper WP/14/005
Abstract: 
The Ali (2013, EB) findings on the nexuses among institutions, finance and investment could have an important influence on policy and academic debates. This paper relaxes his hypotheses on the conception, definition and measurement of finance and institutions because they are less realistic to developing countries to which the resulting policy implications are destined. We dissect with great acuteness the contextual underpinnings of financial development dynamics and elucidate why the Acemoglu & Johnson (2005) justification provided for the measurement of property rights institutions (PRI) is lacking in substance. Using updated data (1996-2010) from 53 African countries, we provide more robust evidence on the substitution of institutions and finance in investment. Results under many baseline and augmented scenarios are not consistent with the underlying paper. Justifications for the differences in findings are discussed. As a policy implication, the Ali (2013, EB) findings for countries with poor financial systems may not be relevant for Africa.
Subjects: 
Finance
Institutions
Investment: Property Rights
Africa
JEL: 
G20
G24
E02
P14
O55
Document Type: 
Working Paper

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