Most studies agree on the fact that the CEMAC sub-region countries in particular have an underdeveloped financial system and more precisely, with a shallow depth. The results of several research projects, particularly the one of Meisel and Mvogo (2007) highlight the need to take the problem of low financial depth in the sub-region seriously compared to other aspects of financial development. Through an estimate of financial development level in the countries of the franc zone, they have found that the most problematic aspect due to its low degree is financial deepening. Their results allow for deducing the fact that the financial development problem in the CEMAC zone could be reduced to financial deepening problems rather than other financial development aspects.
In the world, financial system has always played an important role in supporting economic activity. Indeed no need for a complex analysis to see what is obvious: all developed countries have one thing in common which is a developed financial system. Moreover in the world and especially sub-Saharan Africa countries, several empirical investigations (Ndebbio, 2004; Odiambho, 2006; Gries et al., 2011 ... etc.] confirmed a positive influence of financial deepening and bank development on economic growth per capita.
If we consider the results of these theoretical and empirical investigations, we can conclude the importance of low financial depth as a current issue in the CEMAC zone. The handling of this major concern assumes that we may be able to list and quantify the actual determinants of financial deepening in the sub region through theoretical and empirical investigation; additionally the analysis of dynamic behavior at the individual level of financial deepening in the sub-region would be of great help for the formulation of harmonized financial policies.
Considering this, I have empirically estimates a micro-founded model with the aims to investigate the leading macroeconomic determinants and dynamics of financial deepening in the CEMAC sub-region. For this purpose, I adopted an empirical investigation in both static and dynamic panel data econometrics which has led to the following global recommendations: firstly, the CEMAC sub-region authorities should implement expansionary policies of GDP growth rate, population density, savings rate and exchange rate. Secondly, they should review their policy of trade liberalization since it appears to be negatively related to financial deepening. Concerning the dynamics aspect, a convergent dynamics and the feasibility of common monetary policy targeting depth in CEMAC sub-region have been highlighted.
In the world, financial system has always played an important role in supporting economic activity. Indeed no need for a complex analysis to see what is obvious: all developed countries have one thing in common which is a developed financial system. Moreover in the world and especially sub-Saharan Africa countries, several empirical investigations (Ndebbio, 2004; Odiambho, 2006; Gries et al., 2011 ... etc.] confirmed a positive influence of financial deepening and bank development on economic growth per capita.
If we consider the results of these theoretical and empirical investigations, we can conclude the importance of low financial depth as a current issue in the CEMAC zone. The handling of this major concern assumes that we may be able to list and quantify the actual determinants of financial deepening in the sub region through theoretical and empirical investigation; additionally the analysis of dynamic behavior at the individual level of financial deepening in the sub-region would be of great help for the formulation of harmonized financial policies.
Considering this, I have empirically estimates a micro-founded model with the aims to investigate the leading macroeconomic determinants and dynamics of financial deepening in the CEMAC sub-region. For this purpose, I adopted an empirical investigation in both static and dynamic panel data econometrics which has led to the following global recommendations: firstly, the CEMAC sub-region authorities should implement expansionary policies of GDP growth rate, population density, savings rate and exchange rate. Secondly, they should review their policy of trade liberalization since it appears to be negatively related to financial deepening. Concerning the dynamics aspect, a convergent dynamics and the feasibility of common monetary policy targeting depth in CEMAC sub-region have been highlighted.
