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Financial reforms, financial development, income inequality and spectral output : evidence from Zambia
Thesis (PhD)--Stellenbosch University, 2026.
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| Format: | Thesis |
| Language: | English |
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Stellenbosch : Stellenbosch University
2026
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| _version_ | 1867613853178658816 |
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| access_status_str | Open Access |
| author | Mwananshiku, Christabel Ntemena Mwila |
| author2 | Fanta, Ashenafi |
| author_browse | Fanta, Ashenafi Mwananshiku, Christabel Ntemena Mwila |
| author_facet | Fanta, Ashenafi Mwananshiku, Christabel Ntemena Mwila |
| author_sort | Mwananshiku, Christabel Ntemena Mwila |
| collection | Thesis |
| dc_rights_str_mv | Stellenbosch University |
| description | Thesis (PhD)--Stellenbosch University, 2026. |
| format | Thesis |
| id | oai:scholar.sun.ac.za:10019.1/136122 |
| institution | Stellenbosch University (South Africa) |
| language | English |
| last_indexed | 2026-06-10T12:42:44.343Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from SUNScholar — Stellenbosch University Repository |
| publishDate | 2026 |
| publishDateRange | 2026 |
| publishDateSort | 2026 |
| publisher | Stellenbosch : Stellenbosch University |
| publisherStr | Stellenbosch : Stellenbosch University |
| record_format | dspace |
| source_str | SUNScholar — Stellenbosch University Repository |
| spelling | oai:scholar.sun.ac.za:10019.1/136122 Financial reforms, financial development, income inequality and spectral output : evidence from Zambia Mwananshiku, Christabel Ntemena Mwila Fanta, Ashenafi Stellenbosch University. Faculty of Economic and Management Sciences. University of Stellenbosch Business School. Thesis (PhD)--Stellenbosch University, 2026. Mwananshiku, C. N. M. 2026. Financial reforms, financial development, income inequality and spectral output : evidence from Zambia. Unpublished doctoral dissertation. Stellenbosch: Stellenbosch University [online]. Available: https://scholar.sun.ac.za/items/4525a353-7d5b-41bc-94a5-a7d5393620aa Zambia has implemented several financial reforms since the 1990s, aimed at enhancing efficiency, deepening financial intermediation, expanding financial inclusion and boosting economic growth. However, the outcome has remained uneven across sectors and income groups, and the financial system is still shallow and largely bank-dominated, characterised by high lending rates and low financial depth relative to its peers. These persistent structural constraints raise questions about the effectiveness of past financial reforms and channels through which financial development contributes to economic growth and income inequality. Moreover, debates on the finance-growth nexus persist, as the theoretical and empirical literature offers no consensus on how financial development influences economic growth and income inequality. Although financial development is often viewed as a potential driver of economic growth and reducing income inequality, empirical evidence on the relationships remains inconclusive, particularly in developing countries like Zambia. Empirically, there is limited country-specific evidence on how financial reforms affect the finance-growth nexus and the distributional effects of financial development on income inequality, particularly in the context of institutional quality. Existing literature offers only a few systematic reviews that assess the finance-growth nexus and how its measurement and methodological approaches have evolved in the post-2008 financial global crisis period. Moreover, most prior studies relied on traditional, narrow measures of financial development and aggregate output indicators, which failed to comprehensively capture the multidimensional nature of financial development and the heterogeneity of sectoral economic activity. The study seeks to address the gaps by (i) conducting a systematic literature review and bibliometric analysis on the evolution of the finance-growth nexus from 2008 to 2023 (ii) examining the moderating role of financial reforms on the finance-growth nexus in Zambia from 1980 to 2021 and (iii) extending the finance-inequality nexus debated by testing the linear and nonlinear effects of financial development on income inequality while considering the role institutional quality. Chapter 2 presents a systematic literature review on the evolution of the finance-growth nexus from 2008 to 2023. The review highlights a growing body of research on different topics, with publication peaks between 2016 and 2023, reflecting heightened interest in financial inclusion, innovation and the impact of shocks such as COVID-19. Panel data analysis dominates while country-specific and qualitative analyses remain limited. A shift from traditional proxies towards multidimensional measures such as the International Monetary Fund’s Financial Development Index underscores the recognition that the financial system has evolved, encompassing depth, access and efficiency in financial markets and institutions. The review underscores that the finance-growth and finance-inequality nexus is context-specific rather than uniform, providing the foundation for this thesis that focuses on Zambia. Chapter 3 empirically examines the moderating role of the financial reforms on the finance-growth nexus in Zambia from 1980 to 2021, using the Autoregressive Distributed Lag (ARDL) model, Financial Development Index (FDI) and disaggregated sectoral value-added data. Empirical results indicate that financial reforms strengthened the nexus in the short run, but the effects dissipated in the long run due to weak regulation, shallow markets, structural vulnerabilities and copper dependence. Sectoral analysis indicates a stronger impact on manufacturing and services, but limited effects on agriculture, reflecting exclusion, collateral constraints and informality. The study extends the finance-growth literature by showing that the relationship is not purely linear, as earlier assumed by extant studies. Instead, the study demonstrates that financial reforms act as a moderating variable strengthening the finance-growth nexus in the short run but with diminishing effects in the long-run. This helps explain why empirical findings vary across periods and countries. The findings suggest that liberalisation alone is insufficient for sustained growth, as complementary measures such as deepened capital markets, stronger institutions, and inclusive financial policies are essential for broad-based development. Chapter 4 analyses the linear and nonlinear effects of financial development on income inequality in Zambia, incorporating institutional quality indicators. Using the ARDL model and data from 1980-2021, the study also evaluates the validity of the Greenwood-Jovanovic hypothesis. As such, it contributes to the emerging theoretical framework on the finance-inequality nexus, an area with mixed and diverse results. The findings from the study reveal that financial development reduces inequality in the long run but widens disparities in the short run as the benefits accrue disproportionately to the wealthy. No evidence supports the Greenwood-Jovanovic inverted U-shaped hypothesis in Zambia. The findings suggest that financial development alone does not automatically lower inequality. Its impact depends on institutional quality, inclusive financial policies, and macroeconomic stability to ensure equitable outcomes. By incorporating financial reforms and institutional quality dynamics into the standard finance-growth and finance-inequality models, the study advances theory and reconciles previous inconsistent findings as well as offers a unified analytical approach that jointly explains distributional and growth outcomes within a developing country context. Using the IMF’s multidimensional Financial Development Index, alongside disaggregated GDP data, the analysis provides a more comprehensive assessment of financial development while capturing sectoral dynamics. By simultaneously examining financial reforms, financial development, sectoral output and income inequality in Zambia, the study generates context-specific and policy-relevant insights for promoting inclusive financial sector development and sustainable economic growth. The findings highlight the significance of strengthening regulatory frameworks, deepening financial markets, and expanding access to finance, particularly within the rural and informal sectors, in order to foster equitable growth. Doctoral 2026-04-22T14:14:03Z 2026-04-22T14:14:03Z 2026-03 Thesis https://scholar.sun.ac.za/handle/10019.1/136122 en Stellenbosch University 205 pages application/pdf Stellenbosch : Stellenbosch University |
| spellingShingle | Mwananshiku, Christabel Ntemena Mwila Financial reforms, financial development, income inequality and spectral output : evidence from Zambia |
| title | Financial reforms, financial development, income inequality and spectral output : evidence from Zambia |
| title_full | Financial reforms, financial development, income inequality and spectral output : evidence from Zambia |
| title_fullStr | Financial reforms, financial development, income inequality and spectral output : evidence from Zambia |
| title_full_unstemmed | Financial reforms, financial development, income inequality and spectral output : evidence from Zambia |
| title_short | Financial reforms, financial development, income inequality and spectral output : evidence from Zambia |
| title_sort | financial reforms financial development income inequality and spectral output evidence from zambia |
| url | https://scholar.sun.ac.za/handle/10019.1/136122 |
| work_keys_str_mv | AT mwananshikuchristabelntemenamwila financialreformsfinancialdevelopmentincomeinequalityandspectraloutputevidencefromzambia |