Abstract:
ABSTRACT
Using quarterly data from 1990 to 2015, this research explores the association
between Financial Development (FD) and exports in Ghana using the
Autoregressive Distributed Lag (ARDL) technique and the Granger causality
test. The causal research design is employed in studying the variables. The study
discovered a one-of-a-kind cointegration association between export and FD.
FD, Real Effective Exchange Rate (REER), Foreign Direct Investment (FDI),
foreign income and production level all had positive statistically significant
influence on exports in both short and long term, according to the regression
results. Furthermore, in both short and long run, inflation had a negative
statistically significant impact on exports. Findings of the Granger causality test
demonstrated bidirectional connection between exports and financial
development. Thus, it is advised that the Government and Bank of Ghana are
required to put effective financial systems in place to propel growth in exports
and also maintain low inflationary rate. In addition, the government must give
incentives to encourage FDI. Government must put in place effective
macroeconomic policy measures to stabilize the exchange rate, attract more
foreign income and increase GDP growth economy
