Does financial sector development promote economic globalization in Africa?

PurposeThis paper investigates whether financial sector development promotes economic globalization (EG) using data from 45 African countries.Design/methodology/approachUsing panel data of the selected African countries, the two-step system generalized method of moments estimation technique which is capable of solving any possible endogeneity problem is employed for the empirical analysis.FindingsThe main finding is that all measures of financial sector development have a significant positive impact on EG in Africa. The results suggest that improving the financial sector development in a holistic manner is key in fostering EG in Africa.Originality/valueThis present paper uses broader measures of EG and financial sector development. Using broader measures of these variables widens the policy scope in terms of policy adoption and implementation.