New Proxy of Financial Development and Economic Growth in Medium-Income Countries: A Bootstrap Panel Granger Causality Analysis

Mhadhbi, Khalil

doi:10.12691/ajams-2-4-2

Cited by 12 publications

(11 citation statements)

References 54 publications

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“…This linkage was further reinforced by [1] on that theoretical foundation of investment, financial instruments, domestic savings, boosting growth through financial system stability [9]. Empirical findings of [10] in 28 African countries, from 1970-2012, [11] in 27 medium-income countries used the finance-led growth to confirm that financial sector growth drives growth in these countries. In cross-sectional studies of finance impacting growth in Nigeria and growth affecting finance in Cote D'Ivoire, [12] revealed a variety of results.…”

Section: Literature Reviewmentioning

confidence: 94%

Financial Deepening and Sustained Economic Growth in Nigeria

Edet¹

2021

ujaf

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The growth-finance nexus in Nigeria is investigated in this research. Prior studies used time-series data and classical linear regression mainly, as well as various financial deepening indexes and methodologies. These studies produced a mixed bag of results. This study is unique as it adopts quarterly data from the three arms of the financial industry (banks, stock markets, and insurance companies) which most previous studies neglected to focus solely on the banking sector. The Autoregressive Distributed Lag (ARDL), Error Correction Model, and the Granger causality test were used to examine the convergence and divergence technique. Prior researches overlook a variety of pre-and diagnostic tests. The findings revealed a long-short run co-integrating nexus. Financial indices respond to economic growth in a linear fashion. The insurance industry has a 28% impact on economic growth. The short-run finding demonstrates a 74% speed of convergence from explanatory variable-induced disequilibrium to long-run equilibrium. Economic growth reacts more quickly to the financial climate's shocks and dynamics. A bi-directional association was discovered using causality testing. Recapitalization of the banking and insurance sectors, as well as a review of the Monetary Policy Rate to enhance lending to the private sector and boost savings and investment, is among the recommendations.

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Section: Literature Reviewmentioning

confidence: 94%

Financial Deepening and Sustained Economic Growth in Nigeria

Edet¹

2021

ujaf

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“…The finding was upheld by Pagano (1993); King and Levine (1993); Hurlin and Venet, (2008) ;Ndubuisi, (2017). Fosu (2013) in 28 African countries; Mhadhbi (2014) in 27 medium-income countries from 1970 to 2012 and Sunde (2013) in Namibia, Herwartz, and Walle (2014) observed supply-led growth in high-income economies than in low-income economies in the 73 countries between 1975-2011.…”

Section: Literature Reviewmentioning

confidence: 96%

Financial Development on Employment Rate in Nigeria

Ndubuaku¹,

Inim²,

Samuel³

et al. 2021

RWE

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This study examines financial development on employment rate in Nigeria on the premise of goal 8 of the sustainable development goals (SDGs). Using the ARDL model and annualized time-series data from 1999-2019. Findings revealed a positive and statistically significant impact of financial development on employment rate. Supporting the Phillips curve of an inverse nexus between inflation rate and unemployment rate. The findings contravene Okun’s law of a negative relationship between economic growth and unemployment rate. The study recommences a policy framework to influence the operational and business activities of financial institutions to stir employment generation and economic growth in Nigeria.

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“…From 1970 to 2012, [21] in 27 medium-income countries, [20] in 28 African countries; and [22] in Namibia all confirm that finance drives growth in these economies. Asserting that finance is a driver of growth, [23] in Nigeria and Cote D'Ivoire reported mixed results of "supply-led growth" in Nigeria and "demand-led growth" in Cote D'Ivoire.…”

Section: Literature Of Related Reviewmentioning

confidence: 96%

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

Udoh¹,

Jack²,

Prince³

et al. 2021

ujaf

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Financial firms' services are considered germane to an economy's expansion universally. 2015-2016 economic and financial in Nigeria can be accredited to the hollowness of the financial firm contracting the economy by 2.06%, 63.7% market capitalization, and 67.2% in all share indexes losses. Prior empirical techniques focus primarily on finance-growth linear nexus. Which begs the question is the reported linear nexus a function of the linear assumption test power or earth evidence? The baseline ARDL and NARDL techniques are used in this research. To observe if there is a possibility of a non-linear association, for structural breaks, the Zivot and Andrews tests were used, as well as Granger causality to test for causality. From 1999Q1-2019Q4, quarterly data from the three arms of financial firms "insurance, banking, and stock market" were used. Findings revealed that economic growth adjusts non-linearly at a faster pace. A variety of macro-non-macroeconomic and financial factors can be implicated in the non-linear adjustment. A bi-directional link between the variables was revealed by causal nexus.

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New Proxy of Financial Development and Economic Growth in Medium-Income Countries: A Bootstrap Panel Granger Causality Analysis

Cited by 12 publications

References 54 publications

Financial Deepening and Sustained Economic Growth in Nigeria

Financial Deepening and Sustained Economic Growth in Nigeria

Financial Development on Employment Rate in Nigeria

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

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