Financial Market Structure and Economic Growth: Evidence from Nigeria Data

In this paper, we investigate both the long run and short run relationships between financial structure and economic growth using time series data. The presence of a unit root in the time series data was tested using Augmented Dickey - Fuller and Philips - Perron tests. The long run relationship amo...

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Bibliographic Details
Published in:Asian economic and financial review 2013-01, Vol.3 (1), p.75
Main Authors: Maduka, Anne C, Onwuka, Kevin O
Format: Article
Language:English
Subjects:
Banking industry
Capital markets
Central banks
Cointegration analysis
Development banks
Economic crisis
Economic growth
Finance companies
Financial institutions
Financial services
Foreign exchange markets
Informal economy
Interest rates
Liberalization
Money markets
Public sector
Reforms
Securities markets
Studies
Time series
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Summary:In this paper, we investigate both the long run and short run relationships between financial structure and economic growth using time series data. The presence of a unit root in the time series data was tested using Augmented Dickey - Fuller and Philips - Perron tests. The long run relationship among the variables is estimated using Johansen and Juselius (1990) maximum likelihood procedure. While the vector error correction model is used to estimate short run the dynamic coefficients. The main results reveal that financial market structure has a negative and significant effect on economic growth based on Nigeria data. This suggests a low level of development of the country's financial sector. The paper therefore recommends that there is a need to put appropriate financial policies in place that will encourage the growth per capita GDP. [PUBLICATION ABSTRACT]
ISSN:2305-2147
2222-6737