Financial development and economic growth in Nigeria: Evidence from threshold modelling

Adeniyi, Oluwatosin; Oyinlola, Abimbola; Omisakin, Olusegun A.; Egwaikhide, Festus O.

doi:10.1016/j.eap.2015.06.003

Cited by 114 publications

(113 citation statements)

References 24 publications

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“…Although few studies based exclusively on Nigeria data exist, none has considered stock market development indicators in the interaction between financial sector development and economic growth in Nigeria (see for instance Adeniyi, Oyinlola, Omisakin, & Egwaikhide, 2015). This study therefore aims to fill this gap in the literature.…”

Section: Public Interest Statementmentioning

confidence: 98%

Economic growth in oil-exporting countries: Do stock market and banking sector development matter? Evidence from Nigeria

Nwani

Orie

2016

Cogent Economics & Finance

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This study empirically examines the independent effects of stock market and banking sector development on economic growth in Nigeria over the period 1981-2014 using the autoregressive distributed lag (ARDL) approach to co-integration analysis. Controlling for the possible effects of crude oil price and trade openness on economic activities in Nigeria, this study found both stock market and banking sector development insignificant in influencing economic growth in Nigeria. In general, the results highlight the weakness of the Nigerian financial sector in stimulating economic growth through resource mobilisation and allocation and the dominant role of the oil sector in economic activities in Nigeria.

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Section: Public Interest Statementmentioning

confidence: 98%

Economic growth in oil-exporting countries: Do stock market and banking sector development matter? Evidence from Nigeria

Nwani

Orie

2016

Cogent Economics & Finance

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“…Deidda and Fattouh (2002) explore a non-linear relation between financial development and economic growth. Adeniyi et al (2015) use annual data to examine the effect of financial development on economic growth in Nigeria and report that financial development negatively impacts growth, but a sign reversal emerges on accounting for threshold-type effects, implying that a threshold effect exists in the financegrowth connection in Nigeria. Law, Azman-Saini, and Ibrahim (2013) find that the impact of finance on growth is positive and significant only after a certain threshold level of institutional development has been reached.…”

Section: Finance-growth Nexus: Empirical Studiesmentioning

confidence: 99%

“…Since the pioneering work by Goldsmith (1969), which lends some credence to the theoretical postulation of Schumpeter (1911) that finance has positive implications for a country's growth trajectory, the growth literature has been flooded with an avalanche of empirical investigations into channels through which the dynamics of financial variables influence capital accumulation and growth (Adeniyi, Oyinlola, Omisakin, & Egwaikhide, 2015;Adusei, 2012Adusei, , 2013Aghion, Howitt, & Mayer-Foulkes, 2005;Alaabed & Masih, 2016;Chow & Fung, 2013;Deidda & Fattouh, 2002;Demirguc-Kunt & Levine, 2008;Ibrahim & Alagidede, 2017;Jalil & Feridun, 2011;King & Levine, 1993;Levine, Loayza, & Beck, 2000;Rioja & Valev, 2004;Ruiz-Vergara, 2017;Saint-Paul, 1992;Sassi & Goaied, 2013;Tran, 2008;Waqabaca, 2004). Unfortunately, these investigations have produced inconclusive results.…”

Section: Introductionmentioning

confidence: 99%

The finance–growth nexus: Does risk premium matter?

Adusei

2018

Int. J Fin Econ

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The bounds testing approach to cointegration analysis is employed in this paper to examine whether the risk premium demanded by the banking sector moderates the finance–growth nexus with data (1970–2015) from South Africa. To the extent that the interaction between risk premium and financial development positively affects growth in the long run, we affirm that the risk premium demanded by the banking sector represents a significant channel through which financial development drives growth. The main policy implication of this finding is that financial liberalization that removes interest rates restrictions, allowing the banking sector to adequately price risk, is in the best interest of the South African economy.

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“…This study uses annual data covering the period from 1981 to 2011. Economic growth is defined as the real GDP per capita, in line with theoretical specifications and previous studies (see Ang and McKibbin, ; Adu et al ., ; Uddin et al ., ; Samargandi et al ., ; Adeniyi et al ., among others). Four indicators of the Nigerian financial intermediary sector are considered: the domestic bank credit to the private sector (per cent of GDP), the ratio of Liquid Liabilities to GDP, Deposit money bank assets to GDP and Bank deposits to GDP.…”

Section: Methodsmentioning

confidence: 88%

Finance and growth in oil‐dependent economies: does crude oil price matter? evidence from Nigeria

Nwani

2016

OPEC Energy Review

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This study examines three possible causal relationships between financial sector development, economic growth and crude oil price in Nigeria using the Autoregressive Distributed Lag (ARDL) approach to cointegration analysis over the period 1981 to 2011. First, the causal effect of financial sector development on economic growth is found to be negatively insignificant in the long‐run and negatively significant in the short‐run suggesting the weakness of financial intermediary sector in resource mobilisation and allocation in Nigeria. Crude oil price is found to be the key driver of economic growth in Nigeria. Second, the causal effect of economic growth on financial sector development is as well found to be negatively insignificant in the long‐run and negatively significant in the short‐run. Third, the causal effect of crude oil price on financial sector development is found to be positive and significant in the long‐run, suggesting that crude oil price is the underlying factor that determines the amount of economic activities passing through the Nigerian financial sector. The results highlight the need for a well‐articulated policy framework that will lessen the high dependence of the Nigerian economy on crude oil.

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Financial development and economic growth in Nigeria: Evidence from threshold modelling

Cited by 114 publications

References 24 publications

Economic growth in oil-exporting countries: Do stock market and banking sector development matter? Evidence from Nigeria

Economic growth in oil-exporting countries: Do stock market and banking sector development matter? Evidence from Nigeria

The finance–growth nexus: Does risk premium matter?

Finance and growth in oil‐dependent economies: does crude oil price matter? evidence from Nigeria

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