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Financial Innovation

Table 5 Interactive regression results for COMESA and EAC (Economic Regions)

From: The comparative African regional economics of globalization in financial allocation efficiency: the pre-crisis era revisited

 

Banking System Efficiency

Financial System Efficiency

Imports

Exports

Trade

FDI

PCF

Finopex

Globex

Imports

Exports

Trade

FDI

PCF

Finopex

Globex

Panel A: The COMESA Region

 Constant

1.048***

1.084***

1.109***

0.934***

0.964***

0.904***

0.890***

111.40***

113.60***

118.65***

97.826***

101.15***

94.285***

92.972***

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

 Imports

−0.003*

–

–

–

–

–

–

−0.523***

–

–

–

–

–

–

(0.081)

      

(0.007)

      

 Exports

–

− 0.005**

–

–

–

–

–

–

− 0.665***

–

–

–

–

–

 

(0.021)

      

(0.003)

     

 Trade

–

–

− 0.003**

–

–

–

–

–

–

− 0.390***

–

–

–

–

  

(0.014)

      

(0.001)

    

 FDI

–

–

–

− 0.022*

–

–

–

–

–

–

− 2.570**

–

–

–

   

(0.081)

      

(0.028)

   

 PCF

–

–

–

–

− 0.021*

–

–

–

–

–

–

− 2.437**

–

–

    

(0.082)

      

(0.030)

  

 Finopex

–

–

–

–

–

− 0.035*

–

–

–

–

–

–

− 4.079**

–

     

(0.074)

      

(0.025)

 

 Globex

–

–

–

–

–

–

− 0.061**

–

–

–

–

–

–

− 6.790***

      

(0.020)

      

(0.005)

 Policy

−0.187***

− 0.213***

− 0.198***

− 0.127***

− 0.119***

−0.098***

− 0.100***

− 19.74***

− 22.81***

−21.97***

− 14.72***

− 13.84***

−10.96***

−11.27***

(0.001)

(0.000)

(0.000)

(0.000)

(0.000)

(0.001)

(0.001)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

 Imports.Policy

0.002*

–

–

–

–

–

–

0.238**

–

–

–

–

–

–

(0.059)

      

(0.023)

      

 Exports.Policy

–

0.003***

–

–

–

–

–

–

0.399***

–

–

–

–

–

 

(0.002)

      

(0.000)

     

 Trade.Policy

–

–

0.001**

–

–

–

–

–

–

0.161***

–

–

–

–

  

(0.014)

      

(0.003)

    

 FDI.Policy

–

–

–

0.020

–

–

–

–

–

–

2.658*

–

–

–

   

(0.167)

      

(0.050)

   

 PCF.Policy

–

–

–

–

0.016

–

–

–

–

–

–

2.260*

–

–

    

(0.236)

      

(0.084)

  

 Finopex.Policy

–

–

–

–

–

0.031

–

–

–

–

–

–

4.100*

–

     

(0.174)

      

(0.054)

 

 Globex.Policy

–

–

–

–

–

–

0.056**

–

–

–

–

–

–

6.651***

      

(0.022)

      

(0.003)

 GDP growth

− 0.002

− 0.001

− 0.001

− 0.004

− 0.003

− 0.004

− 0.003

− 0.291

− 0.199

− 0.221

− 0.406

− 0.395

− 0.402

− 0.278

(0.380)

(0.585)

(0.552)

(0.176)

(0.220)

(0.180)

(0.317)

(0.300)

(0.478)

(0.438)

(0.177)

(0.183)

(0.181)

(0.355)

 Inflation

−0.001***

− 0.001***

− 0.001***

− 0.001***

− 0.001***

− 0.001***

− 0.001***

− 0.194***

− 0.198***

− 0.200***

− 0.207***

− 0.212***

− 0.208***

− 0.219***

(0.000)

(0.000)

(0.000)

(0.000)

(0.001)

(0.001)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

 Public Investment

−0.007

−0.010**

− 0.007

− 0.006

−0.008*

− 0.006

−0.006

0.191

−0.131

0.230

−0.101

− 0.239

−0.102

− 0.065

(0.134)

(0.044)

(0.176)

(0.196)

(0.097)

(0.196)

(0.217)

(0.692)

(0.774)

(0.640)

(0.836)

(0.621)

(0.836)

(0.894)

 Foreign Aid

−0.003

−0.003*

− 0.003

−0.004*

− 0.005**

−0.004*

− 0.004

−0.504**

− 0.601***

−0.630***

− 0.774***

−0.878***

− 0.778***

−0.685***

(0.137)

(0.072)

(0.103)

(0.051)

(0.015)

(0.050)

(0.107)

(0.017)

(0.002)

(0.002)

(0.001)

(0.000)

(0.001)

(0.003)

 Hausman test

6.67

9.73

7.44

7.81

9.06

7.30

9.73

7.44

4.16

6.70

5.91

18.28**

5.80

8.31

 R2 within

0.133

0.151

0.155

0.133

0.133

0.133

0.147

0.208

0.224

0.246

0.207

0.206

0.208

0.227

 Fisher

5.34***

6.17***

6.40***

4.73***

4.83***

4.76***

5.35***

9.08***

9.99***

11.42***

8.10***

8.18***

8.12***

9.11***

 Observations

259

259

261

233

237

233

233

259

259

261

233

237

233

233

Panel B: The EAC Region

 Constant

0.265**

0.557***

0.426***

0.435***

0.424***

0.316***

0.239***

14.870

53.842***

34.199***

42.848***

41.931***

33.333***

28.188***

(0.039)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.009)

(0.218)

(0.000)

(0.003)

(0.000)

(0.000)

(0.000)

(0.002)

 Imports

0.0002

–

–

–

–

–

–

0.540

–

–

–

–

–

–

(0.957)

      

(0.175)

      

 Exports

–

− 0.019***

–

–

–

–

–

–

−1.785***

–

–

–

–

–

 

(0.000)

      

(0.000)

     

 Trade

–

–

− 0.004**

–

–

–

–

–

–

− 0.190

–

–

–

–

  

(0.045)

      

(0.406)

    

 FDI

–

–

–

− 0.057***

–

–

–

–

–

–

− 4.562**

–

–

–

   

(0.002)

      

(0.013)

   

 PCF

–

–

–

–

− 0.057***

–

–

–

–

–

–

− 4.541**

–

–

    

(0.002)

      

(0.012)

  

 Finopex

–

–

–

–

–

− 0.075***

–

–

–

–

–

–

− 6.003**

–

     

(0.002)

      

(0.012)

 

 Globex

–

–

–

–

–

–

− 0.017

–

–

–

–

–

–

−3.657

      

(0.646)

      

(0.326)

 Policy

−0.414

− 0.165

− 0.372**

− 0.034

− 0.029

0.012

0.002

− 17.746

7.914

− 14.378

− 2.236

− 1.383

4.807

4.712

(0.107)

(0.125)

(0.012)

(0.611)

(0.645)

(0.759)

(0.959)

(0.462)

(0.484)

(0.330)

(0.747)

(0.834)

(0.253)

(0.274)

 Imports.Policy

0.013

–

–

–

–

–

–

0.698

–

–

–

–

–

–

(0.125)

      

(0.401)

      

 Exports.Policy

–

0.009*

–

–

–

–

–

–

0.014

–

–

–

–

–

 

(0.060)

      

(0.980)

     

 Trade.Policy

–

–

0.007***

–

–

–

–

–

–

0.394

–

–

–

–

  

(0.008)

      

(0.170)

    

 FDI.Policy

–

–

–

0.022

–

–

–

–

–

–

3.436

–

–

–

   

(0.301)

      

(0.133)

   

 PCF.Policy

–

–

–

–

0.021

–

–

–

–

–

–

3.194

–

–

    

(0.302)

      

(0.141)

  

 Finopex.Policy

–

–

–

–

–

0.029

–

–

–

–

–

–

4.367

–

     

(0.300)

      

(0.136)

 

 Globex.Policy

–

–

–

–

–

–

− 0.034

–

–

–

–

–

–

0.191

      

(0.370)

      

(0.959)

 GDP growth

0.006

0.015**

0.008

0.015*

0.016*

0.015*

0.013

0.171

1.040

0.221

0.583

0.629

0.607

0.580

(0.491)

(0.047)

(0.366)

(0.070)

(0.063)

(0.066)

(0.156)

(0.856)

(0.193)

(0.812)

(0.505)

(0.471)

(0.487)

(0.526)

 Inflation

0.0003

0.003**

0.001

0.0006

0.0004

0.0005

0.001

0.075

0.425**

0.183

0.120

0.113

0.117

0.135

(0.875)

(0.043)

(0.472)

(0.780)

(0.832)

(0.806)

(0.656)

(0.750)

(0.037)

(0.436)

(0.603)

(0.623)

(0.613)

(0.589)

 Public Investment

0.047***

0.047***

0.047***

0.030**

0.030**

0.030**

0.046***

4.212**

3.781***

3.681***

2.361

2.383

2.370

3.538**

(0.007)

(0.000)

(0.001)

(0.047)

(0.047)

(0.047)

(0.008)

(0.010)

(0.006)

(0.007)

(0.135)

(0.130)

(0.133)

(0.036)

 Foreign Aid

0.001

−0.0007

0.003

−0.0003

0.0002

−0.00004

0.0005

0.448

0.587

0.885

0.638

0.669

0.652

0.622

(0.849)

(0.903)

(0.602)

(0.962)

(0.968)

(0.995)

(0.942)

(0.554)

(0.349)

(0.194)

(0.380)

(0.355)

(0.369)

(0.420)

 Hausman test

5.73*

18.96****

11.93***

4.55

4.45

4.49

4.48

12.31***

21.82***

17.28***

9.98***

9.75***

9.85***

10.84***

 R2 within

0.406

0.655

0.490

0.520

0.524

0.522

0.406

0.496

0.634

0.478

0.523

0.525

0.524

0.469

 Fisher

4.40***

12.24***

6.45***

6.99***

7.08***

7.05***

4.41***

6.33***

11.16***

6.16***

7.06***

7.11***

7.09***

5.69***

 Observations

55

55

57

55

55

55

55

55

55

57

55

55

55

55

  1. *, **, ***: significance levels of 10%, 5% and 1% respectively. Policy: Regionalisation Policy. Imports: Imports of Goods and Services. Exports: Exports of Goods and Services. Trade: Imports plus Exports of Goods and Services. FDI: Foreign Direct Investment. PCF: Private Capital Flows. Finopex: Financial Openness Index. Globex: Globalisation Index. GDPg: Gross Domestic Product Growth rate. Pub. Ivt: Public Investment. Aid: Foreign Aid or Development Assistance. COMESA: Common Markets for Eastern and Southern Africa. EAC: East African Community. The bold values are the significant estimated coefficients and the Fisher statistics
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