Relationship between Financial Development and Economic Growth in Nigeria: A Triangulation Approach

Modebe Nwanneka Judith and Ezeaku Hillary Chijindu
Additional contact information
Modebe Nwanneka Judith: Department of Banking and Finance, University of Nigeria, Enugu Campus, Nigeria
Ezeaku Hillary Chijindu: Department of Banking and Finance, Caritas University, Enugu, Nigeria

International Journal of Economics and Financial Issues, 2016, vol. 6, issue 4, 1842-1850

Abstract: This paper aims at evaluating relation between financial development and economic growth in Nigeria, taking exception from existing literatures by integrating broad distinctive indicators of financial development into our model and using different econometric techniques to assess the finance- growth link between 1987 and 2014. The findings indicate that financial development and economic growth move along together in the long run. It was revealed that credit to the private sector, stock market capitalization and inflation have negative and impact on the economy, while broad money supply, trade openness and foreign direct investment exert positive influence on the economy. The error correction term in the model availed us the correctional influence in the speed of adjustment which indicated that errors of divergence from equilibrium was corrected at the speed of 86% each year. The Granger causality tests show that gross domestic product was granger causal for foreign direct investment, without a feedback system.

Keywords: Financial Development; Economic Growth; Error Correction Model (search for similar items in EconPapers)
JEL-codes: G10 G18 G20 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.econjournals.com/index.php/ijefi/article/download/2748/pdf (application/pdf)
http://www.econjournals.com/index.php/ijefi/article/view/2748/pdf (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2016-04-74

Access Statistics for this article

International Journal of Economics and Financial Issues is currently edited by Ilhan Ozturk

More articles in International Journal of Economics and Financial Issues from Econjournals
Bibliographic data for series maintained by Ilhan Ozturk ().