The Link between Financial System and Economics: Functions of the Financial System, Financial Crises, and Policy Implications

Kahraman, Serpil; Umutlu, Mehmet

doi:10.2139/ssrn.2427694

Cited by 1 publication

(1 citation statement)

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“…It also facilitates the flow of credits in the economy. Therefore, it is essential to have an effective and efficient financial system in a country (Akdogu and Umutlu, 2014). Within the national financial system, the banking sector is very crucial to ensure the efficient operation of complex and delicate balance systems of money and credit (Adeyemi, 2005).…”

Section: Introductionmentioning

confidence: 99%

Impact of the banking sector reform in the construction sector

Saka

Olanipekun

2021

JFMPC

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Purpose Banking sector reforms can impact the development of the real sector. However, there is very little known about this impact on the construction sector in a developing country context. This study aims to evaluate the impact of the banking sector reform on the construction output (CNS) using the banking sector reform in Nigeria in 2005 (2005 Banking Sector Reform Programme [BSRP]) as a case. Design/methodology/approach This study used econometric methodology comprising unit root test for stationarity, Johansen test for cointegration, analysis of variance (ANOVA) and the analysis of covariance. Time series data covering a period from 1981 to 2017 (37 years) about the banking and construction sector performances are analyzed using ten-time series equations. Findings The ANOVA estimates reveal that the 2005 BSRP positively impacted the CNS and construction sector growth rate. However, the ANOVA estimates reveal that the gross domestic product (GDP) and bank total loan had a positive impact on CNS in the period (1981–2017) before and after the 2005 BSRP, and consequently removing the effect of the 2005 BSRP on CNS. Practical implications This paper concludes that the banking sector reform has a positive impact on CNS in the Nigerian construction industry. The impact is greater and lasting when the reform is directly targeted at improving CNS. Originality/value This study provides empirical evidence of the dependence between banking sector reform and construction sector performance in a developing country context. Also, this study demonstrates the relationship between GDP, banking sector reform and construction sector performance in a developing country context.

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Section: Introductionmentioning

confidence: 99%