Do Financial and Trade Openness Lead to Financial Sector Development in Nigeria?

Olaronke Onanuga ()

Zagreb International Review of Economics and Business, 2016, vol. 19, issue 2, 57-68

Abstract: With so many countries of the world now open to global capital and trade, this study identi?es whether ?nancial and trade openness contribute to the development of Nigeria’s ?nancial system by considering both ?nancial depth and access to ?nance indicators. To achieve this objective, we applied the Simultaneous Openness Hypothesis as our theoretical framework and the Generalized Method of Moments (GMM) as our estimation method. Our ?ndings reveal that opening trade while neglecting capital (vice versa) may be detrimental to the development of Nigeria ?nancial system. In view of this evidence, we recommend that the simultaneous opening of trade and ?nance is a more guaranteed way of ensuring improved ?nancial development in Nigeria. JEL Classification: F1; F3; G1; G2

Keywords: Financial Openness; Trade Openness; Financial Development; Financial Institutions; Financial Markets (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (10)

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