Purpose

The paper examines whether there is a threshold between financial development and poverty in African economies.

Design/methodology/approach

The study adopts the innovative dynamic panel threshold model of Seo and Shin (2016) made practicable by Seo et al. (2019)–the model estimates threshold relationship even in the presence of endogeneity. Also, following the recommendations of Cihak et al. (2013) and Sahay et al. (2015), we also adopt a robust measure of financial development based on the four pillars of financial deepening, stability, efficiency and access derived from the principal component analysis (PCA).

Findings

The empirical results show that there exists a threshold level of financial development necessary for poverty reduction in Africa.

Research limitations/implications

Our result is important for policy formulations. First, individual African country must discover the level of financial development necessary for spurring poverty reduction. Second, policymakers, especially in lower-income countries, must keep improving their financial sector development to achieve the threshold level necessary for achieving poverty reduction even though financial development might seem less relevant at its present level.

Practical implications

The policymakers in Africa should note that there exists a threshold level of financial development that reduces poverty. Hence, the present level of financial development might have not yielded a considerate effect on poverty. Still, the policymakers must keep pushing on until the threshold is achieved.

Social implications

Financial development reduces poverty level but it must reach a certain threshold level before it does so. So, we advise African policymakers to continue to develop their financial sector to achieve this threshold.

Originality/value

This seems to be the first work to document the threshold relationship using the dynamic panel threshold. Besides, the study specifically concentrates on Africa dividing the continent into different income levels. Moreover, we adopt a robust measure of financial development unlike extant studies on Africa.

中文翻译：

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非洲的金融发展与贫困之间是否存在非线性关系？

目的

本文考察了非洲经济体的金融发展与贫困之间是否存在门槛。

设计/方法/方法

该研究采用了 Seo等人提出的实用的 Seo 和 Shin (2016) 的创新动态面板阈值模型。(2019) – 即使存在内生性，模型也会估计阈值关系。此外，遵循 Cihak等人的建议。(2013) 和 Sahay等人。(2015)，我们还基于主成分分析 (PCA) 得出的金融深化、稳定性、效率和可及性四大支柱，采用了稳健的金融发展衡量标准。

发现

实证结果表明，非洲存在减贫所需的金融发展门槛水平。

研究限制/影响

我们的结果对政策制定很重要。首先，单个非洲国家必须发现刺激减贫所需的金融发展水平。其次，政策制定者，尤其是低收入国家的政策制定者，必须不断改进其金融部门的发展，以达到实现减贫所需的门槛水平，尽管金融发展在目前的水平上似乎不太相关。

实际影响

非洲的政策制定者应该注意到，存在减少贫困的金融发展门槛水平。因此，目前的金融发展水平可能并没有对贫困产生充分的影响。尽管如此，政策制定者必须继续努力，直到达到门槛。

社会影响

金融发展可以降低贫困水平，但必须达到一定的门槛水平。因此，我们建议非洲决策者继续发展其金融部门以达到这一门槛。

原创性/价值

这似乎是第一个使用动态面板阈值记录阈值关系的工作。此外，该研究特别关注将非洲大陆划分为不同收入水平的非洲。此外，与现有的非洲研究不同，我们采用了强有力的金融发展衡量标准。