Agro-industrialisation and financial intermediation in Nigeria

Ngozi Adeleye, Evans Osabuohien and Simplice Asongu

African Journal of Economic and Management Studies, 2020, vol. 11, issue 3, 443-456

Abstract: Purpose - The study aims to analyse the role of finance in the agro-industrialisation nexus in Nigeria using annual data on manufacturing value added, agricultural value added and volume of finance availed to the agricultural sector from 1981 to 2015. Design/methodology/approach - To establish the presence of a long-run relationship, the error correction model and bounds cointegration techniques are employed. Likewise, the model is augmented to test whether the associated relationship between industrial output and agricultural output depends on access to finance by farmers with the inclusion of an interaction term. Findings - Some salient contributions to the literature are as follows: agriculture and finance are strong and positive predictors of industrialisation in the long run; in the short run, past realisations of industrial output and finance have significant asymmetric effects on industrial output; the explanatory power of agriculture decreases with the growth of the financial system; and the long-run results validate the role of finance in the agro-industrialisation nexus. Originality/value - Given these findings, achieving growth in the agricultural sector that will induce desired industrialisation should be prioritised by the government through agencies such as the central bank, financial intermediaries and other stakeholders with a view to making agricultural financing a major concern for sustainable domestic consumption and industrial growth.

Keywords: Agriculture; Industrialization; Financial intermediation; Cointegration; Causality; E44; G18; O13; O14; Q14 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

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:eme:ajemsp:ajems-02-2019-0078

DOI: 10.1108/AJEMS-02-2019-0078

Access Statistics for this article

African Journal of Economic and Management Studies is currently edited by Prof John Kuada

More articles in African Journal of Economic and Management Studies from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().