EFFECT OF PENSION FUND INVESTMENT IN EQUITY ON FINANCIAL SECTOR DEVELOPMENT IN NIGERIA

Ilo Bamidele (), Yinusa Olumuyiwa Ganiyu () and Oyedokun Godwin Emmanuel ()
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Ilo Bamidele: Department of Banking and Finance, Postal: Olabisi Onabanjo University,, Ago-Iwoye, Nigeria.,, https://jted.citn.org/
Yinusa Olumuyiwa Ganiyu: Department of Banking and Finance,, Postal: Olabisi Onabanjo University,, Ago-Iwoye, Nigeria.,, https://jted.citn.org/
Oyedokun Godwin Emmanuel: Department of Management and Accounting, Postal: Lead City University,, Ibadan, Nigeria.,, https://jted.citn.org/

Journal of Taxation and Economic Development, 2023, vol. 22, issue 1, 78-96

Abstract: Efficient allocation of pension fund assets is expected to enhance financial development in terms of depth, access, efficiency, and stability. This study examined the effect of Pension Fund Investment in equity on financial development in Nigeria. The study adopted an ex-post-facto research design. The population of this study is 14 years of Nigeria's economy from the year 2007-2020. Time-series data were sourced for this study which are entirely secondary data from the Pension Commission, Central Bank of Nigeria Statistical bulletin (2020), and Nigeria Bureau of Statistics (NBS) and Nigeria Stock Exchange (NSE), Annual Report, Security and Exchange Commission (SEC), Global Pension at a glance by Organization for Economic Cooperation and Development (OECD), Financial Development Database by International Monetary Fund (IMF) and World Bank Databank among others. The study covers the period from 2007 to 2020. The result shows that in the long run, Pension Fund Investment in Equity has a positive and significant effect on financial development (LPENINVEQ = 2.346, t-test= 2.184, ρ = 0.035 and LPENINSLMMS = -1.952, t-test = -3.231, ρ = 0.000), Thus, as Pension Fund Investment in Equity increases by one-unit, financial development increases by 0.59 units which is statistically significant at a 1% level. The study then recommends that the federal government should continue to step up pension reforms with a view to pre-financing of future liabilities, as this will have a positive impact on the financial market.

Keywords: Equity; Financial sector; Financial development; Pension; Pension Fund Investment; Nigeria (search for similar items in EconPapers)
JEL-codes: G23 Z33 (search for similar items in EconPapers)
Date: 2023
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