EFFECT OF TRILEMMA INDEX ON FINANCIAL INSTITUTION DEVELOPMENT: EVIDENCE FROM AFRICA

Authors

  • Yves Claude Nshimiyimanaa University of Lay Adventists of Kigali, Department of Finance, RWANDA
  • Albert Ong’uti Maake University of Lay Adventists of Kigali, Department of Economics, RWANDA
  • Dr. Ricardo Saavedra Universidad Azteca (Azteca University, Director & Chair International Programs, MEXICO

Abstract

Our main concern is which choice among the trilemma index affects financial institution development in developing countries. This study advances the empirical method to study the trilemma index and financial institution development in Africa. Using Ordinary Least Squares, Two Stages Least Squares and two steps system Generalized Method of Moments (GMM) techniques estimator with a dataset covering a number of 44 African countries over an extended period of time of 30 years, we indicate that monetary independence and financial market openness policies are the best indexes that significantly affect positively financial institution development in Africa. The main reason for this is that majority of African countries do not have well developed financial institutions, and they do not have the capacity to control exchange rate stability. The endogeneity tests are consistent with the findings.

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Published

2021-11-27

How to Cite

Nshimiyimanaa, Y. C., Maake, A. O., & Saavedra, D. R. (2021). EFFECT OF TRILEMMA INDEX ON FINANCIAL INSTITUTION DEVELOPMENT: EVIDENCE FROM AFRICA. EUROPEAN JOURNAL OF INNOVATION IN NONFORMAL EDUCATION, 1(1), 36–57. Retrieved from https://inovatus.es/index.php/ejine/article/view/13

Issue

Vol. 1 No. 1 (2021): European Journal of Innovation in Nonformal Education

Section

Articles