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Re-examining the link between financial structure and economic growth in Nigeria: An empirical investigation

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  • Gidigbi, Matthew

    () (Economics Department, Modibbo Adama University of Technology, Yola, Nigeria.)

Abstract

This paper re-examined the link between financial structure and economic growth in Nigeria. It sets to identify the prevailing financial structure in Nigeria and the link between the financial structure and economic growth in the face of expansion in the financial organisation size and depths. The paper used annual data from the Central Bank of Nigeria and the World Bank Development Indicators, covering the period of 1981 to 2017. The study adopted a Cobb-Douglas production function form model and applied autoregressive distributed lagged (ARDL) regression. The paper found out that bank-based intermediary is the prevailing financial structure in Nigeria. Also, financial structure contributed positively to outputs in Nigeria within the period investigated. The study recommends that the banking sector should be developed in such a way that it would promote the development of the capital market, and continual development of the banking sector should be maintained.

Suggested Citation

  • Gidigbi, Matthew, 2019. "Re-examining the link between financial structure and economic growth in Nigeria: An empirical investigation," BizEcons Quarterly, Strides Educational Foundation, vol. 5, pages 3-21.
  • Handle: RePEc:ris:buecqu:0009
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    References listed on IDEAS

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    1. Demirguc-Kunt, Ash & Levine, Ross, 1996. "Stock Market Development and Financial Intermediaries: Stylized Facts," World Bank Economic Review, World Bank Group, vol. 10(2), pages 291-321, May.
    2. Levine, Ross & Zervos, Sara, 1998. "Stock Markets, Banks, and Economic Growth," American Economic Review, American Economic Association, vol. 88(3), pages 537-558, June.
    3. Hicks, J. R., 1969. "A Theory of Economic History," OUP Catalogue, Oxford University Press, number 9780198811633.
    4. Levine, Ross, 2002. "Bank-Based or Market-Based Financial Systems: Which Is Better?," Journal of Financial Intermediation, Elsevier, vol. 11(4), pages 398-428, October.
    5. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
    6. Demirguc-Kunt, Asli & Levine, Ross, 1999. "Bank-based and market-based financial systems - cross-country comparisons," Policy Research Working Paper Series 2143, The World Bank.
    7. Robert C. Merton, 1995. "A Functional Perspective of Financial Intermediation," Financial Management, Financial Management Association, vol. 24(2), Summer.
    8. Chandavarkar, Anand, 1992. "Of finance and development: Neglected and unsettled questions," World Development, Elsevier, vol. 20(1), pages 133-142, January.
    9. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    More about this item

    Keywords

    Economic growth; Capital productivity; Financial market; Financial structure;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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