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...
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| Format: | Article |
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Faculty of Economics, University of Tuzla
2020-05-01
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| Series: | Economic Review |
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| Online Access: | https://www.er.ef.untz.ba/index.php/er/article/view/61 |
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| author | Amassoma Ditimi Azeez Oluwatobiloba |
| author_facet | Amassoma Ditimi Azeez Oluwatobiloba |
| author_sort | Amassoma Ditimi |
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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.
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| format | Article |
| id | doaj-art-6c5cefd4030a402c97c2e7ea10d9a383 |
| 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-6c5cefd4030a402c97c2e7ea10d9a3832025-02-11T00:32:58ZengFaculty 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. https://www.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 | https://www.er.ef.untz.ba/index.php/er/article/view/61 |
| work_keys_str_mv | AT amassomaditimi capitalinflowsfinancialdeepeningandeconomicgrowthnexusthemissinglink AT azeezoluwatobiloba capitalinflowsfinancialdeepeningandeconomicgrowthnexusthemissinglink |