Foreign bank presence and inclusive growth in Africa: the moderating role of financial development

Purpose: The purpose of this study is to assess the extent to which the nexus between foreign bank presence (FBP) and inclusive growth is being impacted by the financial development. Design/methodology/approach: The study used a two-stage system generalized method of moment (GMM), using 28 African countries from the period 2000 to 2018. Findings: The study found a positive effect of FBP on inclusive growth. While financial development magnifies the positive effect of FBP, inclusive growth nexus, it has a direct effect on inclusive growth. Practical implications: For Africa to ascertain the positive effect of FBP on inclusive growth, financial system must be developed to reduce the cream-skim behavior of foreign banks. Originality/value: This paper assess the extent to which developing economy's developed financial system form synergies with FBP to further enhance the inclusiveness of growth.