Financial development in South Africa: The role of natural resources, IT infrastructure, and government size

Figures & data

Table 1. Descriptive statistics

	LFDBK	LFDBM	LFDFS	LFDPC	LFFDI	LGOV	LNATU	LTELE	LTO
Mean	3.999609	4.018185	4.783650	4.560533	20.51267	24.43580	1.483041	14.95994	3.868173
Median	4.048514	3.959320	4.911803	4.688818	20.81837	24.42023	1.439073	15.21820	3.888520
Maximum	4.253936	4.312111	5.144125	4.958795	23.01428	24.97662	2.484193	15.51896	4.189269
Minimum	3.739745	3.726092	4.269330	3.987541	15.02686	23.53800	0.763934	13.72777	3.535768
Std. Dev.	0.161397	0.171813	0.299523	0.330271	1.994576	0.428015	0.420930	0.579644	0.150404

Table 2. Results of unit root test

Variable	ADF test t-statistic		ZA test t-statistic (break year)
	At levels	At first difference	At levels	At first difference
LTELE	0.657	−4.397***	1.329(2013)	−5.780***(2002)
LGOV	−2.618	−5.043***	−3.116(1981)	−7.460***(2000)
LNATU	−3.440	−8.704***	−3.627(1990)	−9.565***(2000)
LTO	−1.978	−6.457***	−3.546(1982)	−6.411***(1995)
LFDBK	−1.192	−7.769***	−3.615(1994)	−5.363*** (2002)
LFDBM	0.046	−5.275***	−3.210(2001)	−6.405***(2009)
LFDFS	−0.625	−8.428***	−2.339(1991)	−9.902***(2008)
LFDPC	−2.660	−6.056***	−2.340(1991)	−5.405***(1985)
LFFDI	−2.507	−8.528***	−3.850(1999)	−6.876***(1993)
FINDEX	−1.252	−6.525***	−2.772(1998)	−4.889***(1984)

*** denotes significance at 1% level

Table 3. Cointegration results

Critical values	Lower bound	Upper bound
10%	2.45	3.52
5%	2.86	4.01
1%	3.74	5.06
Model	f-statistic	Cointegration status
With LFDFS as dependent variable	3.87	Confirmed
With LFDBK as dependent variable	9.58	Confirmed
With LFDPC as dependent variable	7.81	Confirmed
With LFFDI as dependent variable	4.77	Confirmed
With FINDEX as dependent variable	5.81	Confirmed
With LFDBM as dependent variable	6.95	Confirmed

Table 4. Regression results from FMOLS

Variables	LFFDI	LFDBK	LFDBM	LFDFS	LFDPC	FINDEX
	Coeff. (SE)	Coeff. (SE)	Coeff. (SE)	Coeff. (SE)	Coeff. (SE)	Coeff. (SE)
Natural resources	−0.819 (0.427)	−0.100*** (0.034)	−0.072 (0.040)	−0.222*** (0.041)	−0.240*** (0.042)	−1.039*** (0.319)
Government expenditure	0.463 (0.936)	0.148 (0.079)	0.238** (0.093)	0.266*** (0.093)	0.385*** (0.098)	2.053*** (0.697)
Telephone infrastructure	1.195 (0.599)	0.136** (0.051)	−0.080 (0.060)	0.271*** (0.060)	0.266*** (0.063)	1.238*** (0.444)
Trade openness	7.354*** (1.464)	0.279** (0.123)	0.658*** (0.139)	0.443*** (0.147)	0.242 (0.151)	5.169*** (1.124)
C	−35.939*** (13.277)	−2.614** (1.101)	−3.044** (1.315)	−7.177*** (1.295)	−9.445*** (1.360)	−87.217*** (9.876)

*** = one percent significant level

** = five percent significant level.

Coeff. = coefficient; SE= standard error

Table 5. DOLS results

Variables	LFFDI	LFDBK	LFDBM	LFDFS	LFDPC	FINDEX
	Coeff. (SE)	Coeff. (SE)	Coeff. (SE)	Coeff. (SE)	Coeff. (SE)	Coeff. (SE)
Natural resources	−0.858 (0.457)	−0.103*** (0.034)	−0.075 (0.040)	−0.227*** (0.045)	−0.245*** (0.047)	−1.135*** (0.380)
Government expenditure	0.785 (0.857)	0.174** (0.072)	0.291*** (0.088)	0.317*** (0.009)	0.389*** (0.101)	2.167*** (0.709)
Telephone infrastructure	0.889 (0.542)	0.114** (0.047)	−0.120** (0.056)	0.222*** (0.063)	0.251*** (0.066)	1.006** (0.441)
Trade openness	7.054*** (1.556)	0.264 (0.131)	0.574*** (0.148)	0.438** (0.017)	0.278 (0.184)	5.086*** (1.377)
C	−37.985*** (12.512)	−2.853*** (1.042)	−3.422*** (1.255)	−7.670*** (1.397)	−9.443*** (1.464)	−86.010*** (10.195)

*** = one percent significant level

** = five percent significant level.

Coeff. = coefficient; SE= standard error.

Data availability statement

Data can be obtained from World Bank (2023) World Development Indicators. https://databank.worldbank.org/source/world-development-indicators#.