To verify the relationship between trade variables and financial development in Africa. We mobilize data from 39 African economies for the period 1990-2021. To achieve this complex measure, we use the financial development index imported from the International Monetary Fund (IMF) statistical database. The variable to be explained, trade openness (LTRADE), is presented by the logarithm of the sum of exports and imports of goods and services, as a percentage of GDP, the logarithm of the volume of exports of goods and services as a percentage of GDP (LEXP), and the logarithm of the volume of imports of goods and services as a percentage of GDP (LIMP). Control variables are also included, namely, economic growth represented by the logarithm of real GDP per capita (LGDPPC), population growth, which may reflect the size of the domestic market, measured by the logarithm of the total population (LPOP), and external financing represented by the logarithm of net foreign direct investment inflows, as a percentage of GDP (LFDI). Data for these variables were imported from the World Bank's World Development Indicator (WDI).

This data consists of remittance, FDI, economic globalization, and financial development dynamics between two region groups, namely: a high remittance and FDI receiving region (European and Central Asian region) and low remittance and FDI receiving region (Sub-Saharan African region) for the period of 1984-2016. These two regions include 44 countries, where 15 highly remittances and FDI receiving developing countries, and 29 less globalized developing countries.

This study requires data on economic globalization and institutions. We have taken data from Gygli, et al. (2019), which is a newly, published KOF economic globalization index dataset in the International monetary fund. This index includes Trade Globalization and Financial Globalization. Trade-in goods, trade regulations, and trade in services, trade taxes, trade partner diversity, tariffs, and trade agreements are included under Trade Globalization. On the other hand, financial globalization is a combination of investment restrictions, portfolio investment, capital account openness, international debt, international Investment Agreements, international reserves, and international income payments. Institutional quality index datasets provided by the International Country Risk Guide (ICRG), which allowed us to test the hypothesis. A total of three control variables that are added to the main model have been proposed in this study, they are as follows, Real GDP per capita, Consumer price index (Inflation), and Gross fixed capital formation. All data are collected from the World Development Indicators and the International Monetary Fund.

Variables Definition Units Source

FD Financial development index Index value International monetary fund

FI Financial institution index Index value International monetary fund

FM Financial market index Index value International monetary fund

REM Personal remittances received (% of GDP) Percentage of GDP World Development Indicators

FDI Foreign direct investment, net inflows (% of GDP) Percentage of GDP World Development Indicators

EGLOB KOF Economic Globalization index Index value International monetary fund (Gygli, Savina, Florian Haelg, Niklas Potrafke and Jan-Egbert Sturm, 2019)

INSQ An institutional quality index(combining all Index value International Country Risk Guide

the variables like Government Stability,

Socioeconomic Conditions, Investment Profile,

Internal Conflict, External Conflict, Corruption,

Military in Politics, Religious Tensions, Law and Order,

Ethnic Tensions, Democratic Accountability,

Bureaucracy Quality and make one index

term by PCA)

GDP GDP per capita Per capita as per constant 2010 US$ World Development Indicators

INF Inflation(GDP deflator) Annual percentage World Development Indicators

GFCF Gross fixed capital formation Percentage of GDP International monetary fund

United States Net Barter Terms of Trade Index data was reported at 104.655 2015=100 in 2021. This records an increase from the previous number of 100.000 2015=100 for 2020. United States Net Barter Terms of Trade Index data is updated yearly, averaging 100.042 2015=100 from Dec 1980 (Median) to 2021, with 42 observations. The data reached an all-time high of 105.128 2015=100 in 1995 and a record low of 91.765 2015=100 in 1985. United States Net Barter Terms of Trade Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s United States – Table US.World Bank.WDI: Trade Index. Net barter terms of trade index is calculated as the percentage ratio of the export unit value indexes to the import unit value indexes, measured relative to the base year 2000. Unit value indexes are based on data reported by countries that demonstrate consistency under UNCTAD quality controls, supplemented by UNCTAD's estimates using the previous year’s trade values at the Standard International Trade Classification three-digit level as weights. To improve data coverage, especially for the latest periods, UNCTAD constructs a set of average prices indexes at the three-digit product classification of the Standard International Trade Classification revision 3 using UNCTAD’s Commodity Price Statistics, international and national sources, and UNCTAD secretariat estimates and calculates unit value indexes at the country level using the current year's trade values as weights.;United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.;;

French Polynesia PF: Import Value Index data was reported at 153.553 2000=100 in 2016. This records a decrease from the previous number of 157.261 2000=100 for 2015. French Polynesia PF: Import Value Index data is updated yearly, averaging 103.502 2000=100 from Dec 1980 (Median) to 2016, with 37 observations. The data reached an all-time high of 223.347 2000=100 in 2008 and a record low of 48.482 2000=100 in 1982. French Polynesia PF: Import Value Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s French Polynesia – Table PF.World Bank.WDI: Trade Index. Import value indexes are the current value of imports (c.i.f.) converted to U.S. dollars and expressed as a percentage of the average for the base period (2000). UNCTAD's import value indexes are reported for most economies. For selected economies for which UNCTAD does not publish data, the import value indexes are derived from import volume indexes (line 73) and corresponding unit value indexes of imports (line 75) in the IMF's International Financial Statistics.; ; United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.; ;

United States US: Import Value Index data was reported at 178.778 2000=100 in 2016. This records a decrease from the previous number of 183.856 2000=100 for 2015. United States US: Import Value Index data is updated yearly, averaging 74.990 2000=100 from Dec 1980 (Median) to 2016, with 37 observations. The data reached an all-time high of 191.578 2000=100 in 2014 and a record low of 20.811 2000=100 in 1982. United States US: Import Value Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s United States – Table US.World Bank.WDI: Trade Index. Import value indexes are the current value of imports (c.i.f.) converted to U.S. dollars and expressed as a percentage of the average for the base period (2000). UNCTAD's import value indexes are reported for most economies. For selected economies for which UNCTAD does not publish data, the import value indexes are derived from import volume indexes (line 73) and corresponding unit value indexes of imports (line 75) in the IMF's International Financial Statistics.; ; United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.; ;

France FR: Import Value Index data was reported at 169.374 2000=100 in 2016. This records a decrease from the previous number of 169.529 2000=100 for 2015. France FR: Import Value Index data is updated yearly, averaging 154.693 2000=100 from Dec 1995 (Median) to 2016, with 22 observations. The data reached an all-time high of 212.961 2000=100 in 2011 and a record low of 84.302 2000=100 in 1997. France FR: Import Value Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s France – Table FR.World Bank.WDI: Trade Index. Import value indexes are the current value of imports (c.i.f.) converted to U.S. dollars and expressed as a percentage of the average for the base period (2000). UNCTAD's import value indexes are reported for most economies. For selected economies for which UNCTAD does not publish data, the import value indexes are derived from import volume indexes (line 73) and corresponding unit value indexes of imports (line 75) in the IMF's International Financial Statistics.; ; United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.; ;

Sao Tome and Principe ST: Import Value Index data was reported at 468.131 2000=100 in 2016. This records a decrease from the previous number of 476.512 2000=100 for 2015. Sao Tome and Principe ST: Import Value Index data is updated yearly, averaging 102.903 2000=100 from Dec 1980 (Median) to 2016, with 37 observations. The data reached an all-time high of 570.131 2000=100 in 2014 and a record low of 33.437 2000=100 in 1985. Sao Tome and Principe ST: Import Value Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Sao Tome and Principe – Table ST.World Bank.WDI: Trade Index. Import value indexes are the current value of imports (c.i.f.) converted to U.S. dollars and expressed as a percentage of the average for the base period (2000). UNCTAD's import value indexes are reported for most economies. For selected economies for which UNCTAD does not publish data, the import value indexes are derived from import volume indexes (line 73) and corresponding unit value indexes of imports (line 75) in the IMF's International Financial Statistics.; ; United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.; ;

Senegal SN: Import Value Index data was reported at 352.780 2000=100 in 2016. This records a decrease from the previous number of 360.343 2000=100 for 2015. Senegal SN: Import Value Index data is updated yearly, averaging 93.703 2000=100 from Dec 1980 (Median) to 2016, with 37 observations. The data reached an all-time high of 421.963 2000=100 in 2013 and a record low of 54.360 2000=100 in 1985. Senegal SN: Import Value Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Senegal – Table SN.World Bank.WDI: Trade Index. Import value indexes are the current value of imports (c.i.f.) converted to U.S. dollars and expressed as a percentage of the average for the base period (2000). UNCTAD's import value indexes are reported for most economies. For selected economies for which UNCTAD does not publish data, the import value indexes are derived from import volume indexes (line 73) and corresponding unit value indexes of imports (line 75) in the IMF's International Financial Statistics.; ; United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.; ;

Slovakia SK: Import Value Index data was reported at 591.601 2000=100 in 2016. This records an increase from the previous number of 574.935 2000=100 for 2015. Slovakia SK: Import Value Index data is updated yearly, averaging 312.053 2000=100 from Dec 1995 (Median) to 2016, with 22 observations. The data reached an all-time high of 641.886 2000=100 in 2014 and a record low of 68.731 2000=100 in 1995. Slovakia SK: Import Value Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Slovakia – Table SK.World Bank.WDI: Trade Index. Import value indexes are the current value of imports (c.i.f.) converted to U.S. dollars and expressed as a percentage of the average for the base period (2000). UNCTAD's import value indexes are reported for most economies. For selected economies for which UNCTAD does not publish data, the import value indexes are derived from import volume indexes (line 73) and corresponding unit value indexes of imports (line 75) in the IMF's International Financial Statistics.; ; United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.; ;

Libya LY: Import Volume Index data was reported at 197.284 2000=100 in 2016. This records a decrease from the previous number of 229.515 2000=100 for 2015. Libya LY: Import Volume Index data is updated yearly, averaging 128.060 2000=100 from Dec 1982 (Median) to 2016, with 35 observations. The data reached an all-time high of 397.293 2000=100 in 2013 and a record low of 91.137 2000=100 in 1999. Libya LY: Import Volume Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Libya – Table LY.World Bank.WDI: Trade Index. Import volume indexes are derived from UNCTAD's volume index series and are the ratio of the import value indexes to the corresponding unit value indexes. Unit value indexes are based on data reported by countries that demonstrate consistency under UNCTAD quality controls, supplemented by UNCTAD’s estimates using the previous year’s trade values at the Standard International Trade Classification three-digit level as weights. To improve data coverage, especially for the latest periods, UNCTAD constructs a set of average prices indexes at the three-digit product classification of the Standard International Trade Classification revision 3 using UNCTAD’s Commodity Price Statistics, international and national sources, and UNCTAD secretariat estimates and calculates unit value indexes at the country level using the current year’s trade values as weights. For economies for which UNCTAD does not publish data, the import volume indexes (lines 73) in the IMF's International Financial Statistics are used.; ; United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.; ;

Ivory Coast CI: Import Value Index data was reported at 404.888 2000=100 in 2016. This records a decrease from the previous number of 405.623 2000=100 for 2015. Ivory Coast CI: Import Value Index data is updated yearly, averaging 113.461 2000=100 from Dec 1980 (Median) to 2016, with 37 observations. The data reached an all-time high of 502.902 2000=100 in 2013 and a record low of 62.324 2000=100 in 1984. Ivory Coast CI: Import Value Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Ivory Coast – Table CI.World Bank.WDI: Trade Index. Import value indexes are the current value of imports (c.i.f.) converted to U.S. dollars and expressed as a percentage of the average for the base period (2000). UNCTAD's import value indexes are reported for most economies. For selected economies for which UNCTAD does not publish data, the import value indexes are derived from import volume indexes (line 73) and corresponding unit value indexes of imports (line 75) in the IMF's International Financial Statistics.; ; United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.; ;

Costa Rica Import Value Index data was reported at 127.374 2015=100 in 2021. This records an increase from the previous number of 91.818 2015=100 for 2020. Costa Rica Import Value Index data is updated yearly, averaging 39.812 2015=100 from Dec 1980 (Median) to 2021, with 42 observations. The data reached an all-time high of 127.374 2015=100 in 2021 and a record low of 5.463 2015=100 in 1982. Costa Rica Import Value Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Costa Rica – Table CR.World Bank.WDI: Trade Index. Import value indexes are the current value of imports (c.i.f.) converted to U.S. dollars and expressed as a percentage of the average for the base period (2000). UNCTAD's import value indexes are reported for most economies. For selected economies for which UNCTAD does not publish data, the import value indexes are derived from import volume indexes (line 73) and corresponding unit value indexes of imports (line 75) in the IMF's International Financial Statistics.;United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.;;

Trinidad and Tobago Net Barter Terms of Trade Index data was reported at 115.285 2015=100 in 2021. This records an increase from the previous number of 74.791 2015=100 for 2020. Trinidad and Tobago Net Barter Terms of Trade Index data is updated yearly, averaging 99.723 2015=100 from Dec 1980 (Median) to 2021, with 33 observations. The data reached an all-time high of 145.320 2015=100 in 1980 and a record low of 63.754 2015=100 in 1988. Trinidad and Tobago Net Barter Terms of Trade Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Trinidad and Tobago – Table TT.World Bank.WDI: Trade Index. Net barter terms of trade index is calculated as the percentage ratio of the export unit value indexes to the import unit value indexes, measured relative to the base year 2000. Unit value indexes are based on data reported by countries that demonstrate consistency under UNCTAD quality controls, supplemented by UNCTAD's estimates using the previous year’s trade values at the Standard International Trade Classification three-digit level as weights. To improve data coverage, especially for the latest periods, UNCTAD constructs a set of average prices indexes at the three-digit product classification of the Standard International Trade Classification revision 3 using UNCTAD’s Commodity Price Statistics, international and national sources, and UNCTAD secretariat estimates and calculates unit value indexes at the country level using the current year's trade values as weights.;United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.;;

Italy IT: Import Value Index data was reported at 169.424 2000=100 in 2016. This records a decrease from the previous number of 172.108 2000=100 for 2015. Italy IT: Import Value Index data is updated yearly, averaging 165.294 2000=100 from Dec 1995 (Median) to 2016, with 22 observations. The data reached an all-time high of 235.352 2000=100 in 2008 and a record low of 86.276 2000=100 in 1995. Italy IT: Import Value Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Italy – Table IT.World Bank.WDI: Trade Index. Import value indexes are the current value of imports (c.i.f.) converted to U.S. dollars and expressed as a percentage of the average for the base period (2000). UNCTAD's import value indexes are reported for most economies. For selected economies for which UNCTAD does not publish data, the import value indexes are derived from import volume indexes (line 73) and corresponding unit value indexes of imports (line 75) in the IMF's International Financial Statistics.; ; United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.; ;

Trinidad and Tobago TT: Import Volume Index data was reported at 163.880 2000=100 in 2016. This records an increase from the previous number of 163.706 2000=100 for 2015. Trinidad and Tobago TT: Import Volume Index data is updated yearly, averaging 120.194 2000=100 from Dec 1980 (Median) to 2016, with 28 observations. The data reached an all-time high of 169.410 2000=100 in 2013 and a record low of 33.515 2000=100 in 1990. Trinidad and Tobago TT: Import Volume Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Trinidad and Tobago – Table TT.World Bank.WDI: Trade Index. Import volume indexes are derived from UNCTAD's volume index series and are the ratio of the import value indexes to the corresponding unit value indexes. Unit value indexes are based on data reported by countries that demonstrate consistency under UNCTAD quality controls, supplemented by UNCTAD’s estimates using the previous year’s trade values at the Standard International Trade Classification three-digit level as weights. To improve data coverage, especially for the latest periods, UNCTAD constructs a set of average prices indexes at the three-digit product classification of the Standard International Trade Classification revision 3 using UNCTAD’s Commodity Price Statistics, international and national sources, and UNCTAD secretariat estimates and calculates unit value indexes at the country level using the current year’s trade values as weights. For economies for which UNCTAD does not publish data, the import volume indexes (lines 73) in the IMF's International Financial Statistics are used.; ; United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.; ;

Chile Import Value Index data was reported at 147.780 2015=100 in 2021. This records an increase from the previous number of 94.910 2015=100 for 2020. Chile Import Value Index data is updated yearly, averaging 30.872 2015=100 from Dec 1980 (Median) to 2021, with 42 observations. The data reached an all-time high of 147.780 2015=100 in 2021 and a record low of 4.923 2015=100 in 1985. Chile Import Value Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Chile – Table CL.World Bank.WDI: Trade Index. Import value indexes are the current value of imports (c.i.f.) converted to U.S. dollars and expressed as a percentage of the average for the base period (2000). UNCTAD's import value indexes are reported for most economies. For selected economies for which UNCTAD does not publish data, the import value indexes are derived from import volume indexes (line 73) and corresponding unit value indexes of imports (line 75) in the IMF's International Financial Statistics.;United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.;;

Senegal Import Value Index data was reported at 173.341 2015=100 in 2021. This records an increase from the previous number of 139.624 2015=100 for 2020. Senegal Import Value Index data is updated yearly, averaging 29.796 2015=100 from Dec 1980 (Median) to 2021, with 42 observations. The data reached an all-time high of 173.341 2015=100 in 2021 and a record low of 15.086 2015=100 in 1985. Senegal Import Value Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Senegal – Table SN.World Bank.WDI: Trade Index. Import value indexes are the current value of imports (c.i.f.) converted to U.S. dollars and expressed as a percentage of the average for the base period (2000). UNCTAD's import value indexes are reported for most economies. For selected economies for which UNCTAD does not publish data, the import value indexes are derived from import volume indexes (line 73) and corresponding unit value indexes of imports (line 75) in the IMF's International Financial Statistics.;United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.;;

Sudan SD: Import Value Index data was reported at 594.826 2000=100 in 2011. This records a decrease from the previous number of 646.923 2000=100 for 2010. Sudan SD: Import Value Index data is updated yearly, averaging 100.000 2000=100 from Dec 1980 (Median) to 2011, with 31 observations. The data reached an all-time high of 646.923 2000=100 in 2010 and a record low of 39.834 2000=100 in 1990. Sudan SD: Import Value Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Sudan – Table SD.World Bank.WDI: Trade Index. Import value indexes are the current value of imports (c.i.f.) converted to U.S. dollars and expressed as a percentage of the average for the base period (2000). UNCTAD's import value indexes are reported for most economies. For selected economies for which UNCTAD does not publish data, the import value indexes are derived from import volume indexes (line 73) and corresponding unit value indexes of imports (line 75) in the IMF's International Financial Statistics.; ; United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.; ;

Italy Import Value Index data was reported at 135.677 2015=100 in 2021. This records an increase from the previous number of 103.881 2015=100 for 2020. Italy Import Value Index data is updated yearly, averaging 101.019 2015=100 from Dec 1995 (Median) to 2021, with 27 observations. The data reached an all-time high of 136.747 2015=100 in 2008 and a record low of 50.129 2015=100 in 1995. Italy Import Value Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Italy – Table IT.World Bank.WDI: Trade Index. Import value indexes are the current value of imports (c.i.f.) converted to U.S. dollars and expressed as a percentage of the average for the base period (2000). UNCTAD's import value indexes are reported for most economies. For selected economies for which UNCTAD does not publish data, the import value indexes are derived from import volume indexes (line 73) and corresponding unit value indexes of imports (line 75) in the IMF's International Financial Statistics.;United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.;;

France FR: Net Barter Terms of Trade Index data was reported at 91.285 2000=100 in 2016. This records a decrease from the previous number of 91.855 2000=100 for 2015. France FR: Net Barter Terms of Trade Index data is updated yearly, averaging 95.637 2000=100 from Dec 2000 (Median) to 2016, with 17 observations. The data reached an all-time high of 100.333 2000=100 in 2002 and a record low of 89.144 2000=100 in 2013. France FR: Net Barter Terms of Trade Index data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s France – Table FR.World Bank.WDI: Trade Index. Net barter terms of trade index is calculated as the percentage ratio of the export unit value indexes to the import unit value indexes, measured relative to the base year 2000. Unit value indexes are based on data reported by countries that demonstrate consistency under UNCTAD quality controls, supplemented by UNCTAD's estimates using the previous year’s trade values at the Standard International Trade Classification three-digit level as weights. To improve data coverage, especially for the latest periods, UNCTAD constructs a set of average prices indexes at the three-digit product classification of the Standard International Trade Classification revision 3 using UNCTAD’s Commodity Price Statistics, international and national sources, and UNCTAD secretariat estimates and calculates unit value indexes at the country level using the current year's trade values as weights.; ; United Nations Conference on Trade and Development, Handbook of Statistics and data files, and International Monetary Fund, International Financial Statistics.; ;