Financial Development: A Fillip or Impediment to Nigeria's Economic Growth

Authors

  • Taofik Mohammed Ibrahim Department of Economics University of Ibadan Ibadan, Oyo State Nigeria
  • Mohammed Isa Shuaibu Department of Economics University of Ibadan Ibadan, Oyo State Nigeria

Abstract

Over the years, substantial theoretical and empirical studies have been conducted on the financial development-economic growth nexus. While a strand of the literature has found a positive linkage between this critical nexus, the other suggests otherwise. This study contributes to the debate by examining the finance-growth nexus for Nigeria using the bounds testing approach to cointegration within an ARDL framework proposed by Pesaran et al. (2001) and the augmented Granger causality test developed by Toda and Yamamoto (1995).Empirical evidence reveals that financial development significantly affects economic growth in the short and long run. The major implication for our study therefore is that financial regulatory institutions need to be strengthened to better maximize the gains from financial development especially its role towards real sector development and job creation for the growing population.

Keywords: Financial Development; Economic Growth; Co-integration; Causality

JEL Classifications: E44; O16; O55

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Author Biographies

Taofik Mohammed Ibrahim, Department of Economics University of Ibadan Ibadan, Oyo State Nigeria

PhD Fellow and Research FellowDepartment of Economics and Centre for Econometric and Allied REsearch (CEAR)University of Ibadan

Mohammed Isa Shuaibu, Department of Economics University of Ibadan Ibadan, Oyo State Nigeria

PhD Fellow and Research FellowDepartment of Economics and Trade Policy Research and Training Programme (TPRTP)University of Ibadan

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Published

2013-02-27

How to Cite

Ibrahim, T. M., & Shuaibu, M. I. (2013). Financial Development: A Fillip or Impediment to Nigeria’s Economic Growth. International Journal of Economics and Financial Issues, 3(2), 305–318. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/362

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