Financial Deepening and Economic Growth in Nigeria: ARDL and NARDL Techniques

Udoh, Ben Etim; Jack, Akpan Ededem; Prince, Abner Ishaku; Ekeowa, Kelvin-Iloafu Lovlyn; Ndubuaku, Victor; Samuel, Udo Emmanuel

doi:10.13189/ujaf.2021.090413

Cited by 4 publications

(3 citation statements)

References 31 publications

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“…The analysis involved conducting long-run bound tests and examining cointegrating coefficients. The decision to employ the nonlinear ARDL technique was motivated by the works of Ben et al (2021). Prior to this, unit root tests were conducted using the Augmented Dickey Fuller test, Phillip Perron test (Enders, 2017), and Zivot and Andrews (1992) unit root test, allowing for the examination of data with one structural break.…”

Section: Model Specificationmentioning

confidence: 99%

Financial Deepening in Nepal: An Asymmetric Analysis With Per Capita Income and Private Sector Credit

Pokhrel,

Adhikari

2022

Econ. Rev. Nep.

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This study examines the asymmetric relationship between private sector credit and per capita income defining financial deepening using annual time-series data from 1994 to 2021. The analysis employed Zivot unit-root testing to identify a significant break in the model and NARDL cointegration analysis to account for this structural break, while also assessing the long-term asymmetric relationship. Findings suggested a cointegrating relationship with private sector credit, indicating that positive shocks in private sector credit contribute to its growth, thereby boosting per capita income and promoting financial deepening in Nepal. Although short-term negative shocks in the private sector were notable, their impact on long-term income growth was minimal. The study highlights the government's role in fostering positive growth of private sector credit to enhance financial deepening in Nepal, cautioning against excessive credit disbursement during recessions or crises, which could undermine financial deepening in the long run; however, the short-run policy revisions during the time of crises are thinkable. This study addresses a geographical gap in prior research by incorporating nonlinearity and structural break unit-root tests, previously unexplored, thereby introducing a novel contribution to the existing body of literature.

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Section: Model Specificationmentioning

confidence: 99%

Financial Deepening in Nepal: An Asymmetric Analysis With Per Capita Income and Private Sector Credit

Pokhrel,

Adhikari

2022

Econ. Rev. Nep.

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“…The importance of the financial industry's growth for the overall progress of the economy, particularly credit circulation in the private sector and the beneficial influence of gross domestic savings and investment, has been highlighted in the study. Edet [26] and Udoh et al [27] conduct two distinct studies, revealing a significant relationship between financial development and economic growth and a bi-directional causal relationship between the two. Along the lines of previous studies, a parallel analysis by Ang [28] also identifies finance as the foremost determinant for driving growth in Malaysia, and acknowledges private savings and investment as two essential elements influencing growth.…”

Section: Literature Reviewmentioning

confidence: 99%

Finance-Growth Nexus in Bangladesh: Is it Important to Quantify Financial Development?

Golder¹,

Sultana²,

Hossain³

et al. 2021

ujaf

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This study aims to examine empirically whether financial development can promote economic growth in Bangladesh. It employs the Autoregressive Distributed Lag (ARDL) model and takes annual data from 1987 to 2019. This study confirms a cointegrating relationship between financial development and economic growth. The nature of this relationship is unidirectional, running from financial development to economic growth. The outcome of the study confirms that financial development, as proxied by private sector loans and broad money supply, augments economic growth in the long-run. As for the control variables, gross domestic savings show an insignificant impact on economic growth when private sector loans are proxied for financial development. However, it confirms a substantial impact on economic growth when broad money supply is proxied for financial development. More interestingly, trade openness, another control variable, suggests an adverse impact on economic growth in the long-run. However, it has a substantial positive influence on economic growth in the short-run. In the short-run, broad money supply at lag 2 and gross domestic savings significantly affect economic growth when broad money supply is proxied for financial development. The findings of this study advocate that a robust and dynamic financial structure in Bangladesh is a critical success factor for developing the country's economic growth.

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“…The studies highlight an important issue as how governance through its components has distinct effects the sustainable performance of stock market of Pakistan. It is also a critical issue as to whether economic or financial growth policies in the emerging countries can be modified and properly implemented through quality governance mechanism (Abduvaliev, 2021;Hussain, Rafique, Khalil, & Nawaz, 2013;Udoh et al, 2021).…”

Section: Introductionmentioning

confidence: 99%

Nexus between Governance Indicators & Sustainable Stock Market Development in Pakistan: Evidences from Symmetric and Asymmetric Analysis

Islam

Bilal

2021

Pak. J. Humanit. Soc. Sci

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The hidden non-linear association between governance indicators & stock market development (SMD) of Pakistan has been scrutinized in this study by using two comparative co-integrating techniques known as ARDL (Auto-regressive Distributed Lag) & NARDL (Non-linear ARDL). Empirical evidence suggests that misrepresented inferences arise by ignoring hidden non-linearity nexus between the variables. The ARDL results indicate that political stability & absence of violence/terrorism does not impact directly the SMD of Pakistan. Voice & accountability positively and significantly impact SMD, but rule of law does not impact SMD of Pakistan directly. The regulatory quality is highly significant and negatively impacts SMD. Contrarily, the NARDL frame indicates significant differences amid coefficients of components of governance index, denoting asymmetric links between variables. The Positive & Negative sums of partial decompositions of Rule of Law, Regulatory Quality, Political Stability & Absence of Violence/Terrorism (PS&AVT), and Voice & Accountability (V&A) significantly impact SMD. The impact of partial Negative multipliers of Regulatory Quality, and PS&AVT has a highly significant and negative impact, while V&A has a significant and positive impact on SMD. The impact of Positive partial multipliers of all variables is positive and significant except V&A. The comparative diagnostics extricate precariousness in policy moratorium. This study will add credence to the predictive power of governance indicators towards SMD of Pakistan by incorporating Positive and Negative decomposed multipliers.

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Financial Deepening and Economic Growth in Nigeria: ARDL and NARDL Techniques

Cited by 4 publications

References 31 publications

Financial Deepening in Nepal: An Asymmetric Analysis With Per Capita Income and Private Sector Credit

Financial Deepening in Nepal: An Asymmetric Analysis With Per Capita Income and Private Sector Credit

Finance-Growth Nexus in Bangladesh: Is it Important to Quantify Financial Development?

Nexus between Governance Indicators & Sustainable Stock Market Development in Pakistan: Evidences from Symmetric and Asymmetric Analysis

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