@workingpaper{Asongu2015br,
title = {Financial globalisation dynamic thresholds for financial development: evidence from Africa},
author = {Lieven De Moor Simplice A. Asongu},
editor = {African 2015 Governance and Development Institute WP/15/035},
url = {http://afridev.org/wp-admin/admin.php?page=teachpress%2Faddpublications.php},
year = {2015},
date = {2015-09-01},
abstract = {Purpose -
We investigate if financial development benefits from financial globalisation are questionable
until certain thresholds of financial globalisation are attained.
Design/methodology/approach -
Financial globalisation is proxied with Net Foreign Direct Investment Inflows as a percentage of
GDP (FDIgdp) whereas financial development entails dynamics of depth, efficiency, activity and
size. The empirical evidence is based on; (i) data from 53 African countries for the period 2000-
2011 and (ii) interactive Generalised Method of Moments with forward orthogonal deviations.
FindingsThe
following findings are established. First, thresholds of FDIgdp from which financial
globalisation increases money supply are 20.50 and 16.00 for below- and above-median subsamples
of financial globalisation respectively. Second, FDIgdp thresholds from which financial
globalisation increases banking system activity and financial system activity for below-median
sub-samples of financial globalisation are 13.81 and 13.29 respectively. Third, for financial size,
there is evidence of: (i) a positive threshold of 21.30 in the full sample and (ii) consistent
increasing returns without a modifying threshold for the above-median sub-sample.
Practical implicationsEvidence
of a positive threshold implies that while the initial effect of financial globalisation on
financial development is negative, there is a positive marginal effect, such that at a certain level
of FDIgdp (or threshold), the overall effect of financial globalisation on the given financial
development dynamic becomes positive. It follows that financial globalisation is both negative
and positive for financial development, with a U-shaped relationship. Therefore the appropriate
role of policy should neither be to stem the tide of capital flows nor to encourage them, but to
understand what levels or thresholds of capital flows are required to benefit domestic financial
development.
Originality/valueWe
have extended the debate on initial or threshold conditions for the financial development
benefits from financial globalisation by providing policy makers with levels of FDI (as
percentage of GDP) that are required to start materialising financial development benefits from
financial globalisation.},
keywords = {Banking; International investment; Financial integration; Development},
pubstate = {published},
tppubtype = {workingpaper}
}

@workingpaper{Asongu2015bv,
title = {Financial globalisation and financial development in Africa: assessing marginal, threshold and net effects},
author = {Lieven De Moor Simplice A. Asongu},
editor = {African 2015 Governance and Development Institute WP/15/040},
url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Financial-globalisation-and-financial-development-in-Africa.pdf},
year = {2015},
date = {2015-09-01},
abstract = {The present inquiry contributes to extant literature by simultaneously accounting for variations in
financial development and financial globalisation in the assessment of hypothetical initial
financial development conditions for the rewards of financial globalisation. The policy relevance
for assessing these variations simultaneously builds on the intuition that, thresholds for financial
development benefits of financial globalisation may also be contingent on initial levels of
financial development. For this purpose, we examine marginal, threshold and net effects of
financial globalisation on financial development throughout the conditional distributions of
financial development. The empirical evidence is based on contemporary and non-contemporary
quantile regressions with data from 53 African countries for the period 1996-2011. Financial
globalisation is measured with Net Foreign Direct Investment inflows whereas financial
development entails all dimensions identified by the Financial Development and Structure
Database of the World Bank. The findings consistently reveal: (i) positive marginal effects, (ii)
unfeasible financial globalisation positive thresholds and (iii) negative financial globalisation net
effects. The second and third findings are fundamentally due to marginal effects of low positive
magnitude. Policy implications are discussed.},
keywords = {Banking; International investment; Financial integration; Development},
pubstate = {published},
tppubtype = {workingpaper}
}

@workingpaper{Asongu2012bk,
title = {Financial development dynamic thresholds of financial globalization: evidence from Africa},
author = {Simplice A Asongu},
editor = {African 2012 Governance and Development Institute WP/12/020},
url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Financial-development-dynamic-thresholds-of-financial-globalization.-Evidence-from-African-countries.pdf},
year = {2012},
date = {2012-06-01},
abstract = {Purpose – The issue of which financial initial conditions are necessary to materialize the
benefits of financial globalization remains open to debate in the literature. In this paper, we try to
put some empirical structure on the concept of financial threshold conditions in order to give
policymakers guidance on the Kose et al. (2011) and Henry (2007) hypothesis. Its object is to
assess if financial benefits of financial globalization are questionable until greater domestic
financial development has taken place in African countries.
Design/methodology/approach – In framing the financial dimension in a more concrete and
tractable manner, we examine the concerns of how domestic financial initial dynamics of depth
(economic and financial systems), efficiency (banking and financial systems), activity (banking
and financial systems) and size, play out in the financial development benefits of financial
globalization. The estimation approach consists of assessing the impact of financial globalization
through-out the conditional distributions of domestic financial development dynamics.
Findings – The introduction of previously missing financial dimensions into the debate
generates a number of important findings. Only financial initial (threshold) conditions of size are
necessary to materialize the benefits of financial globalization. While financial depth only
partially validates the hypothesis, dynamics of efficiency and activity (credit) do not confirm the
hypothesis.
Practical implications – Addressing the issue of surplus liquidity in African financial
institutions could improve the benefits of financial size and potentially reverse the trends of
financial efficiency and activity. Depending on the context of sampled countries, the appropriate
role of policy has always been either to stem the tide of capital flows or encourage them.
Policymakers who have been viewing their challenges exclusively from the latter perspective for
benefits in growth (finance) might be getting the financial dynamics badly wrong.
Originality/value – Blanket financial development policies may not reap the financial benefits
of financial globalization until domestic financial dynamics of depth, efficiency, activity and size are critically considered. The introduction of the last three previously missing components in the
literature sheds more light on the globalization-development nexus.},
keywords = {Banking; International investment; Financial integration; Development},
pubstate = {published},
tppubtype = {workingpaper}
}

@workingpaper{Asongu2012bs,
title = {Are financial benefits of financial globalization questionable until greater domestic financial development has taken place?},
author = {Simplice A Asongu},
editor = {African 2012 Governance and Development Institute WP/12/007},
url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Are-the-financial-benefits-of-financial-globalisation-questionable-until-greater-domestic-financial-development-has-taken-place.pdf},
year = {2012},
date = {2012-03-01},
abstract = {Purpose – The issue of which financial initial conditions are necessary to materialize the
benefits of financial globalization remains open to debate in the literature. In this paper, we try to
put some empirical structure on the concept of financial threshold conditions in order to give
policymakers guidance on the Kose et al.(2011) and Henry(2007) hypothesis. Its object is to
assess if financial benefits of financial globalization are questionable until greater domestic
financial development has taken place in developing countries.
Design/methodology/approach – In framing the financial dimension in a more concrete and
tractable manner, we probe into the concerns of how domestic financial initial dynamics of
depth(economic and financial systems), efficiency(banking and financial systems), activity
(banking and financial systems) and size play-out in the financial development benefits of
financial globalization. The estimation approach consists of assessing the impact of financial
globalization through-out the conditional distributions of domestic financial development
dynamics.
Findings – The introduction of previously missing financial dimensions into the debate
generates a number of important findings. Only financial initial(threshold) conditions in depth
and size are necessary to materialize the benefits of financial globalization. Domestic dynamics
of efficiency and activity(credit) do not confirm the hypothesis.
Practical implications – Depending on the context of sampled countries, the appropriate role of
policy has always been either to stem the tide of capital flows or encourage them. Policymakers
who have been viewing their challenges exclusively from the later perspective for benefits in
growth(finance) might be getting the financial dynamics badly wrong.
Originality/value – Blanket financial development policies may not reap the financial benefits
of financial globalization until domestic financial dynamics of depth, efficiency, activity and size
are critically considered. The introduction of the last three previously missing components in the
literature sheds more light on the globalization-development nexus.},
keywords = {Banking; International investment; Financial integration; Development},
pubstate = {published},
tppubtype = {workingpaper}
}