Industrial Sector and the Finance-Growth Nexus: Evidence from Nigeria
The present study explores the nexus amongst financial development, industrial sector, and economic growth in Nigeria using time series data throuhout 1986–2018. We appliedthe Autoregressive Distributed Lag (ARDL) approach to co-integration proposed by Pesaran and Shin (2001). Based on the result, we found that financial development exerts a positive impact on economic growth in Nigeria in both short and long terms while industrial sector development insignificantly enhances economic growth in Nigeria both in the short and long run. Based on this outcome, the study, therefore, concludes that financial development (proxied by domestic credit to the private sector) and industrial sector stimulates economic growth. It is therefore recommended that the government, through the central bank of Nigeria (CBN), should enhance the financing of the industrial sector by improving credit flow to it because of its strategic importance in generating employment and growth of the economy.
