Financial System Stability as a Determinant of Agripreneurship in the Central African Economic and Monetary Community Sub-Region

Abstract

Purpose: This study examines financial system stability as a determinant of agripreneurship in the Central African Economic and Monetary Community (CEMAC) sub-region, comprising Cameroon, the Central African Republic, Chad, the Republic of Congo, Equatorial Guinea, and Gabon.

Method: The study adopts an ex post facto, correlational design using secondary panel data from the six member states and estimates a Panel Autoregressive Distributed Lag model, applying both the Mean Group and Pooled Mean Group estimators, with fixed- and random-effects models serving as robustness checks. The Hausman specification test favored the Mean Group estimator over the Pooled Mean Group, confirming significant heterogeneity in long-run relationships across the member states.

Results: Findings reveal that financial stability exerts a negative and statistically significant effect on agripreneurship in the short run, while its long-run effect is positive but statistically insignificant at the regional level, leading the study to conclude that financial stability alone does not significantly drive agripreneurship in CEMAC over the long term. Regulatory quality shows a positive and significant short-run effect, underscoring the importance of governance and institutional strength, while country-level estimates indicate that Cameroon is the only member state in which financial stability exerts a positive and significant long-run effect on agripreneurship.

Implications: The study recommends that financial stability reforms be paired with targeted agricultural financing schemes, financial inclusion incentives, stronger regulatory enforcement, and investment specifically targeted to agricultural value chains rather than general capital growth.

Originality: This study makes several original contributions to the literature on financial systems and agripreneurship within the Central African Economic and Monetary Community (CEMAC). First, unlike previous studies that have largely focused on the direct relationship between finance and agricultural performance in individual countries, this research investigates financial system stability as a determinant of agripreneurship across the entire CEMAC sub-region, thereby providing a regional perspective that captures cross-country heterogeneity among Cameroon, the Central African Republic, Chad, the Republic of Congo, Equatorial Guinea, and Gabon.