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Asafo-Adjei E, Boateng E, Isshaq Z, et al. Financial sector and economic growth amid external uncertainty shocks: Insights into emerging economies. PLoS One. 2021;16(11):e0259303doi: 10.1371/journal.pone.0259303.
Asafo-Adjei, E., Boateng, E., Isshaq, Z., Idun, A. A., Owusu Junior, P., & Adam, A. M. (2021). Financial sector and economic growth amid external uncertainty shocks: Insights into emerging economies. PloS one, 16(11), e0259303. https://doi.org/10.1371/journal.pone.0259303
Asafo-Adjei, Emmanuel, et al. "Financial sector and economic growth amid external uncertainty shocks: Insights into emerging economies." PloS one vol. 16,11 (2021): e0259303. doi: https://doi.org/10.1371/journal.pone.0259303
Asafo-Adjei E, Boateng E, Isshaq Z, Idun AA, Owusu Junior P, Adam AM. Financial sector and economic growth amid external uncertainty shocks: Insights into emerging economies. PLoS One. 2021 Nov 11;16(11):e0259303. doi: 10.1371/journal.pone.0259303. eCollection 2021. PMID: 34762668; PMCID: PMC8584713.
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PLoS One. 2021 Nov 11;16(11):e0259303. doi: 10.1371/journal.pone.0259303. eCollection 2021.

Financial sector and economic growth amid external uncertainty shocks: Insights into emerging economies.

PloS one

Emmanuel Asafo-Adjei, Ebenezer Boateng, Zangina Isshaq, Anthony Adu-Asare Idun, Peterson Owusu Junior, Anokye M Adam

Affiliations

  1. Department of Finance, School of Business, University of Cape Coast, Cape Coast, Ghana.

PMID: 34762668 PMCID: PMC8584713 DOI: 10.1371/journal.pone.0259303

Abstract

The study aims to shed new lights on the lead-lag relationships between the financial sector (RFSI) and economic growth (GDP) in the midst of global economic policy uncertainty (GEPU) shocks for BRICS economies. Hence, the bivariate, partial, and wavelet multiple correlations techniques are employed. From the bivariate analysis, we document positive bi-directional causality between the RFSI and economic growth over the sample period. The partial wavelet reveals that GEPU shocks distort the significance and directional comovements between the RFSI and GDP. Moreover, the outcome from the wavelet multiple cross correlations (WMCC) indicates that the RFSI is a first mover at most time scales for the BRICS economies. This is followed by GEPU which either leads or lags for most scales, especially for South Africa. The impact of GEPU on RFSI and GDP is worst for South Africa in about four cases in the medium-, and long-terms. This signifies that South Africa's financial markets and economic growth are vulnerable to GEPU. However, the impetus for GEPU to drive the comovements between the financial sector and economic activity was less pronounced in the pre-COVID analysis conducted with the WMCC. The study supports both the supply-leading and demand-following hypotheses. Our findings also underscore the need for policymakers, investors and academics alike to incessantly observe the dynamics between finance and growth across time and periodicity while considering adverse shocks from global economic policy uncertainty in tandem.

Conflict of interest statement

The authors have declared that no competing interests exist.

References

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  3. Heliyon. 2021 Oct 19;7(10):e08211 - PubMed

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