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This paper examined the relationship between financial sector development and economic growth in Nigeria. The paper used the Principal Component Analysis (PCA), Autoregressive Distributed Lag Model (ARDL),Structural Break Test and the Pairwise Granger Causality Test (PGC) to examine the effect of financial development on economic growth in Nigeria and to establish which theory holds for Nigeria between the demand-following and the supply-leading theory. Annual time series data between 1981 and 2016 was used for the study. Data on real gross domestic product, broad money supply/gdp, inflation, credit to the private sector/gdp, total liquid liabilities, total stocks/shares traded and total stock market capitalization were sourced from the Central Bank of Nigeria (CBN) statistical bulletin. The structural break unit root test revealed that all the variables are stationary at their first difference except for inflation that was stationary in its level form; the bound test cointegration analysis established the existence of long run relationship among the variables. The ARDL revealed that financial development negatively and insignificantly affected economic growth in Nigeria during the period of study.
Oladotun Olaniran. 2018. \u201cNew Insights into Financial Sector Development and Economic Growth Nexus in Nigeria\u201d. Global Journal of Human-Social Science - E: Economics GJHSS-E Volume 18 (GJHSS Volume 18 Issue E6): .
Crossref Journal DOI 10.17406/GJHSS
Print ISSN 0975-587X
e-ISSN 2249-460X
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Total Score: 102
Country: Nigeria
Subject: Global Journal of Human-Social Science - E: Economics
Authors: Oladotun Olaniran, Aderajo Oluwatosin Mary (PhD/Dr. count: 0)
View Count (all-time): 152
Total Views (Real + Logic): 3040
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Publish Date: 2018 08, Thu
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This paper examined the relationship between financial sector development and economic growth in Nigeria. The paper used the Principal Component Analysis (PCA), Autoregressive Distributed Lag Model (ARDL),Structural Break Test and the Pairwise Granger Causality Test (PGC) to examine the effect of financial development on economic growth in Nigeria and to establish which theory holds for Nigeria between the demand-following and the supply-leading theory. Annual time series data between 1981 and 2016 was used for the study. Data on real gross domestic product, broad money supply/gdp, inflation, credit to the private sector/gdp, total liquid liabilities, total stocks/shares traded and total stock market capitalization were sourced from the Central Bank of Nigeria (CBN) statistical bulletin. The structural break unit root test revealed that all the variables are stationary at their first difference except for inflation that was stationary in its level form; the bound test cointegration analysis established the existence of long run relationship among the variables. The ARDL revealed that financial development negatively and insignificantly affected economic growth in Nigeria during the period of study.
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