The Drivers of International Financial Integration and their Implications on the Nigerian Economy: An Error Correction Model Approach

Hillary Chijindu Ezeaku, Kenneth Chikezie Anyalechi, Josaphat. U.J. Onwumere and E. J. Okereke
Additional contact information
Hillary Chijindu Ezeaku: Department of Banking and Finance, Caritas University, Enugu, Nigeria,
Kenneth Chikezie Anyalechi: Retail Businesses, First Bank of Nigeria Ltd., Nigeria,
Josaphat. U.J. Onwumere: Department of Banking and Finance, University of Nigeria Enugu Campus, Enugu, Nigeria
E. J. Okereke: Department of Banking and Finance, University of Port Harcourt, Choba, Rivers State, Nigeria

International Journal of Economics and Financial Issues, 2018, vol. 8, issue 6, 30-34

Abstract: This study examined the determinants of international financial integration (IFI) and how they impact on the Nigerian economy over the period 1986-2015. The error correction model was employed to regress the key determinants of IFI against GDP growth, and to ascertain the speed of adjustment. The results showed that financial market capitalisation and trade openness both have negative and insignificant influence on economic growth. The real effective exchange rate has positive but insignificant effect on economic growth while inflation exerted positive and significant impact on the economy. The Engel and Granger cointegration test result shows evidence of long-run association between economic growth and the independent variables. The dynamic estimate provided evidence of long-run causality running from IFI determinants to economic growth. The coefficient of the error correction term indicates that the system corrects disequilibrium in the previous period at the speed of 81.43% annually to get at the steady state.

Keywords: Financial Integration; market capitalization; Openness; Growth; Cointegration (search for similar items in EconPapers)
JEL-codes: F4 F43 G1 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econjournals.com/index.php/ijefi/article/download/7189/pdf (application/pdf)
https://www.econjournals.com/index.php/ijefi/article/view/7189/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:journ1:2018-06-5

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 ().