Search
  Advanced Search
 
Journal search
Journal cover: Journal of Economic Studies

Journal of Economic Studies

ISSN: 0144-3585

Online from: 1974

Subject Area: Economics

Content: Latest Issue | icon: RSS Latest Issue RSS | Previous Issues

Options: To add Favourites and Table of Contents Alerts please take a Emerald profile

Previous article.Icon: Print.Table of Contents.Icon: .

Is financial development a spur to poverty reduction? Kenya's experience


Document Information:
Title:Is financial development a spur to poverty reduction? Kenya's experience
Author(s):Nicholas M. Odhiambo, (Economics Department, University of South Africa (UNISA), Pretoria, South Africa)
Citation:Nicholas M. Odhiambo, (2010) "Is financial development a spur to poverty reduction? Kenya's experience", Journal of Economic Studies, Vol. 37 Iss: 3, pp.343 - 353
Keywords:Africa, Economic growth, Kenya, Poverty
Article type:Research paper
DOI:10.1108/01443581011061311 (Permanent URL)
Publisher:Emerald Group Publishing Limited
Acknowledgements:JEL classification – G20, E40, D90, C22.
Abstract:

Purpose – The paper seeks to examine the inter-temporal causal relationship between financial development and poverty reduction in Kenya during the period 1968-2006. The study attempts to answer one critical question: is financial development in Kenya a spur to poverty reduction?

Design/methodology/approach – The study uses a trivariate causality model based on cointegration and error-correction mechanism. Unlike the majority of the previous studies, the current study incorporates the savings rate as an intermittent variable in the bivariate causality setting between financial development and poverty reduction – thereby creating a simple trivariate causality model.

Findings – The study finds a distinct causal flow from financial development to poverty reduction in Kenya. In addition, the study finds a uni-directional causality from financial development to savings and a bi-directional causality between savings and poverty reduction. The results apply irrespective of whether the causality test is conducted in the short run or in the long run.

Practical implications – The empirical results of this study will help policy makers to determine whether the financial development in Kenya is pro-poor and pro-savings.

Originality/value – Although several attempts have been made to investigate the relationship between financial development, savings, economic growth and other macroeconomic variables, very few studies have examined the impact of financial development on the ultimate policy goal, i.e. poverty reduction. Moreover, the majority of the previous studies are based mainly on Asia and Latin America – affording sub-Saharan African countries very little or no coverage at all.



Fulltext Options:

Login

Login

Existing customers: login
to access this document

Login


- Forgot password?
- Athens/Institutional login

Purchase

Purchase

Downloadable; Printable; Owned
HTML, PDF (86kb)Purchase

To purchase this item please login or register.

Login


- Forgot password?

Recommend to your librarian

Complete and print this form to request this document from your librarian


Marked list


Bookmark & share

Reprints & permissions