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Financial Liberalization and Economic Growth in Nigeria: An Empirical Evidence

Author

Listed:
  • Anthony Orji

    (Department of Economics, University of Nigeria, Nsukka, Nigeria,)

  • Jonathan E. Ogbuabor

    (Department of Economics, University of Nigeria, Nsukka, Nigeria)

  • Onyinye I. Anthony-Orji

    (Department of Economics, University of Nigeria, Nsukka, Nigeria.)

Abstract

The liberalization thesis has generated a lot of debate in theoretical and empirical literature. In this paper we construct an index of financial liberalization from 1981 to 2012 to investigate its impact on economic growth in Nigeria using the McKinnon Shaw framework. The ordinary least squares methodology and cointegration analysis are adopted in the study. The result reveals that financial liberalization (FINDEX) and private investment (PINV) have significant positive impact on economic growth in Nigeria. However, real lending rate (LDR) proved to be negatively related to economic growth in Nigeria within the period under review. We therefore conclude that the monetary authorities and policy makers in Nigeria need to support the liberalization process by formulating complementary policies and financial sector reform measures that will help in strengthening the impact of the liberalization process on the economy and also ensure that the benefits of the liberalization exercise is maximized.

Suggested Citation

  • Anthony Orji & Jonathan E. Ogbuabor & Onyinye I. Anthony-Orji, 2015. "Financial Liberalization and Economic Growth in Nigeria: An Empirical Evidence," International Journal of Economics and Financial Issues, International Journal of Economics and Financial Issues, vol. 5(3), pages 663-672.
    • Handle: RePEc:eco:journ1:2015-03-05
    as

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    References listed on IDEAS

    as
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    Cited by:

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    12. Clement Moyo & Pierre Le Roux, 2018. "Interest rate reforms and economic growth: the savings and investment channel," Working Papers 1813, Department of Economics, Nelson Mandela University, revised Mar 2018.
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    14. Shuhua Xu & Md. Qamruzzaman & Anass Hamadelneel Adow, 2021. "Is Financial Innovation Bestowed or a Curse for Economic Sustainably: The Mediating Role of Economic Policy Uncertainty," Sustainability, MDPI, vol. 13(4), pages 1-18, February.
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    Keywords

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    JEL classification:

    • B26 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Financial Economics
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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