CAPITAL INFLOWS, FINANCIAL DEEPENING AND ECONOMIC GROWTH NEXUS: THE MISSING LINK
The purpose of this study was to investigate direct effects of capital inflow, financial deepe-ning on economic growth in Nigeria due to diverse contentions it stirred among researchers from 1981 to 2018 using the Autoregressive Distributive Lag (ARDL) co-integration approach. The findings from the...
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Faculty of Economics, University of Tuzla
2020-05-01
|
| Series: | Economic Review |
| Subjects: | |
| Online Access: | http://er.ef.untz.ba/index.php/er/article/view/61 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1823861248234618880 |
|---|---|
| author | Amassoma Ditimi Azeez Oluwatobiloba |
| author_facet | Amassoma Ditimi Azeez Oluwatobiloba |
| author_sort | Amassoma Ditimi |
| collection | DOAJ |
| description |
The purpose of this study was to investigate direct effects of capital inflow, financial deepe-ning on economic growth in Nigeria due to diverse contentions it stirred among researchers from 1981 to 2018 using the Autoregressive Distributive Lag (ARDL) co-integration approach. The findings from the study showed the existence of a long-run relationship between foreign capital inflows and economic growth in Nigeria. Furthermore, the ARDL regression estimate re-sults pointed that foreign direct investment (FDI), foreign aids (FA) and financial development (FD) have a positive and significant impact on economic growth, while on the contrary, remittances exerted a negative and insignificant relationship on economic growth. Also inflation and exchange rate results showcased a negative impact on economic growth. Based on the findings of this study, we conclude that capital in-flows (FDI, & FA) positively impact the Nigerian economy both in the short run and long-run within the study period via sound financial deepening, thus concluding that capital inflows are a potential driver of economic growth in Nigeria. Consequently, the study recommends that the central bank should employ a more restrictive monetary policy to suppress the ad-verse effect that could emanate from inflationary pressure which can distort proper channeling of capital inflows into the country.
|
| format | Article |
| id | doaj-art-4897a05c813c4c11877a1b459da20841 |
| institution | Kabale University |
| issn | 1512-8962 2303-680X |
| language | English |
| publishDate | 2020-05-01 |
| publisher | Faculty of Economics, University of Tuzla |
| record_format | Article |
| series | Economic Review |
| spelling | doaj-art-4897a05c813c4c11877a1b459da208412025-02-10T00:30:55ZengFaculty of Economics, University of TuzlaEconomic Review1512-89622303-680X2020-05-01181CAPITAL INFLOWS, FINANCIAL DEEPENING AND ECONOMIC GROWTH NEXUS: THE MISSING LINKAmassoma Ditimi0Azeez OluwatobilobaFederal University Oye-Ekiti, Department of Economics, Ekiti State, Nigeria The purpose of this study was to investigate direct effects of capital inflow, financial deepe-ning on economic growth in Nigeria due to diverse contentions it stirred among researchers from 1981 to 2018 using the Autoregressive Distributive Lag (ARDL) co-integration approach. The findings from the study showed the existence of a long-run relationship between foreign capital inflows and economic growth in Nigeria. Furthermore, the ARDL regression estimate re-sults pointed that foreign direct investment (FDI), foreign aids (FA) and financial development (FD) have a positive and significant impact on economic growth, while on the contrary, remittances exerted a negative and insignificant relationship on economic growth. Also inflation and exchange rate results showcased a negative impact on economic growth. Based on the findings of this study, we conclude that capital in-flows (FDI, & FA) positively impact the Nigerian economy both in the short run and long-run within the study period via sound financial deepening, thus concluding that capital inflows are a potential driver of economic growth in Nigeria. Consequently, the study recommends that the central bank should employ a more restrictive monetary policy to suppress the ad-verse effect that could emanate from inflationary pressure which can distort proper channeling of capital inflows into the country. http://er.ef.untz.ba/index.php/er/article/view/61capital inflowseconomic growthARDL modelbounds co-integration test |
| spellingShingle | Amassoma Ditimi Azeez Oluwatobiloba CAPITAL INFLOWS, FINANCIAL DEEPENING AND ECONOMIC GROWTH NEXUS: THE MISSING LINK Economic Review capital inflows economic growth ARDL model bounds co-integration test |
| title | CAPITAL INFLOWS, FINANCIAL DEEPENING AND ECONOMIC GROWTH NEXUS: THE MISSING LINK |
| title_full | CAPITAL INFLOWS, FINANCIAL DEEPENING AND ECONOMIC GROWTH NEXUS: THE MISSING LINK |
| title_fullStr | CAPITAL INFLOWS, FINANCIAL DEEPENING AND ECONOMIC GROWTH NEXUS: THE MISSING LINK |
| title_full_unstemmed | CAPITAL INFLOWS, FINANCIAL DEEPENING AND ECONOMIC GROWTH NEXUS: THE MISSING LINK |
| title_short | CAPITAL INFLOWS, FINANCIAL DEEPENING AND ECONOMIC GROWTH NEXUS: THE MISSING LINK |
| title_sort | capital inflows financial deepening and economic growth nexus the missing link |
| topic | capital inflows economic growth ARDL model bounds co-integration test |
| url | http://er.ef.untz.ba/index.php/er/article/view/61 |
| work_keys_str_mv | AT amassomaditimi capitalinflowsfinancialdeepeningandeconomicgrowthnexusthemissinglink AT azeezoluwatobiloba capitalinflowsfinancialdeepeningandeconomicgrowthnexusthemissinglink |