DOES COMMERCIAL BANK CREDITS STIMULATE AGGREGATE OUTPUT LEVEL IN THE EMERGING COUNTRY? EVIDENCE FROM THE MANUFACTURING SECTOR IN NIGERIA

Izuchukwu Ogbodo, Uzoma Friday Christopher, Ugwu Kevin Okoh and Ikechukwu Cyriacus Mgbobi
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Izuchukwu Ogbodo: Department of Banking and Finance, Enugu State University of Science and Technology, Enugu, Nigeria.
Uzoma Friday Christopher: Department of Banking and Finance, Enugu State University of Science and Technology, Enugu, Nigeria.
Ugwu Kevin Okoh: Department of Accountancy, Enugu State University of Science and Technology, Nigeria.
Ikechukwu Cyriacus Mgbobi: Department of Accounting, Gregory University Uturu, Nigeria.

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Abstract: This study examines the impact of commercial bank credits on aggregate output level in the emerging country with special interest in Nigeria from (1999-2020). After the preliminary investigation using the Augmented Dickey Fuller for Unit Roots and error correction regression (ECM). The results are as follows: commercial bank credits have a negative and insignificant effect on Nigeria's industrial production, control variables such as broad money supply and interest rates have significant and positive effects, the study finds that bank lending did not affect manufacturing production throughout the study year. This study therefore recommends that monetary policy should aim to cut interest rates to boost investment borrowing.

Date: 2022-10-26
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Published in Journal of Global Economics, Management and Business Research, 2022, 14 (2), pp.20-29. ⟨10.56557/jgembr/2022/v14i27908⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05134292

DOI: 10.56557/jgembr/2022/v14i27908

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