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Exploring Multidimensional Financial Inclusion and Manufacturing Firms Performance in a Developing Country: The Case of Nigeria

Author

Listed:
  • Efobi, Uchenna
  • Tanankem, Belmondo
  • Asongu, Simplice
  • Beecroft, Ibukun

Abstract

This study used the matching technique to explore the impact of financial inclusion on the performance of manufacturing firms in Nigeria. Most studies that have considered financial inclusion have largely focused on household access to the services of financial institutions, but have inadvertently underexplored the impact on the performance of firms, especially in developing countries like Nigeria. On the one hand, financial inclusion is measured using a multidimensional measure, which includes (i) firms having between 20-40 percent of their working capital financed through borrowing from the bank; (ii) firms having an overdraft facility to finance their operation and (iii) firms having a line of credit or loan from a financial institution. On the other hand, firm performance is measured using the lag total annual sales value of the firm in local currency unit. From the matching estimation, we find that whereas firms perform better with the aid of access to bank services, the extent differs in relation to the type of access they have. We interpret these results as showing that financial deepening increases firms’ performance only dependent on the type of financial inclusion that is being observed.

Suggested Citation

  • Efobi, Uchenna & Tanankem, Belmondo & Asongu, Simplice & Beecroft, Ibukun, 2016. "Exploring Multidimensional Financial Inclusion and Manufacturing Firms Performance in a Developing Country: The Case of Nigeria," MPRA Paper 76589, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:76589
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Financial inclusion; Manufacturing Firms; Development; Nigeria;

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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