WSEAS Transactions on Business and Economics


Print ISSN: 1109-9526
E-ISSN: 2224-2899

Volume 18, 2021

Notice: As of 2014 and for the forthcoming years, the publication frequency/periodicity of WSEAS Journals is adapted to the 'continuously updated' model. What this means is that instead of being separated into issues, new papers will be added on a continuous basis, allowing a more regular flow and shorter publication times. The papers will appear in reverse order, therefore the most recent one will be on top.

Volume 18, 2021


Causal Relationship Between Financial Sector Development in SMEs & Economic Growth in Southern Africa Region

AUTHORS: Abigail Chivandi, Happiness Makumbe, Olorunjuwon Samuel

DOI: 10.37394/23207.2021.18.95
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ABSTRACT: This study explores causal relationship between financial sector development in SMEs and economic growth in Zimbabwe using annual time series and the Error Correction Model (ECM) framework. Monetary sector improvement and financial development stayed a controversial issue in Southern African nations. Market analysts have distinctive hypothetical and exact perspectives on the causal connection between monetary sector improvement and financial development. support supply driving speculation that monetary sector improvement prompts financial development & credit to request pulling speculation which proposes that monetary improvement results from financial development. Study made use of Unit Root Tests, Cointegration, ECM and Granger Causality Tests. Empirical findings revealed a bidirectional relationship between financial sector development in SMEs, economic & business growth. Business & Economic Growth enhance a strong and flexible legal system allowing banks to allocate resources (credit) more efficiently to SMEs. Credit should be accessed by all enterprise fairly to encourage the development of indigenous businesses through SMEs.

KEYWORDS: Small Medium Enterprise, Granger Causality, Economic Growth, Time Series, Business Enterprise, Gross Domestic Product

Wseas Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 18, 2021, Art. #95, pp. 996-1018


Copyright Β© 2021 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution License 4.0