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Institutional Quality and Financial Sector Development: Empirical Evidence from Nigeria
American Journal of Business and Management
View Archive Info| Field | Value | |
| Title |
Institutional Quality and Financial Sector Development: Empirical Evidence from Nigeria
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| Creator |
Fagbemi, Fisayo
Ajibike, John Oluwasegun |
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| Subject |
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| Description |
In view of the indispensable role of financial sector in both emerging and developing economies, there has been a notable spotlight on the financial sector development over the years in most African countries. Nonetheless, there are only a few studies on this topical issue, particularly for Nigeria. Hence, this study examines the long – run and short – run dynamic relationship between institutional quality and financial development in Nigeria over the period of 1984 – 2015 using Auto-Regressive Distributed Lag (ARDL) bounds test approach to cointegration. Using two different indicators (Private credit and M2) of financial development, the results consistently show that institutional factors do not have significant effect on financial development in the long – run as well as in the short – run. Furthermore, the empirical evidence indicates that regulatory quality and governance system (institutions) do not necessarily contribute to financial development in a feeble institutional environment, specifically in Nigeria. Thus, our findings suggest that whilst weak institutions could increase the risk of limiting the functioning of financial system, good governance and strong institutions are the essential ingredient of financial development in Nigeria. As a consequence, policies aimed at strengthening the quality of institutions and governance should form the major policy thrust of government (policy makers). These could help improving financial sector development in Nigeria.
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| Publisher |
World Scholars
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| Contributor |
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| Date |
2018-04-14
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article |
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| Format |
application/pdf
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| Identifier |
http://wscholars.com/index.php/ajbm/article/view/919
10.11634/216796061706919 |
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| Source |
American Journal of Business and Management; Vol 7, No 1 (2018); 1-13
2167-9614 2167-9606 |
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| Language |
eng
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| Relation |
http://wscholars.com/index.php/ajbm/article/view/919/pdf
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| Rights |
Copyright (c) 2018 American Journal of Business and Management
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