RE-EXAMINING THE LINK BETWEEN FINANCE AND ECONOMIC GROWTH IN NIGERIA: THE GREGORY AND HANSEN(1996) COINTEGRATION APPROACH
PDF

Keywords

Financial Development; Economic Growth; Structural Break.

How to Cite

ELIJAH, S., & HAMZA, N. (2019). RE-EXAMINING THE LINK BETWEEN FINANCE AND ECONOMIC GROWTH IN NIGERIA: THE GREGORY AND HANSEN(1996) COINTEGRATION APPROACH. Asia Proceedings of Social Sciences, 4(3), 5-7. https://doi.org/10.31580/apss.v4i3.797

Abstract

The financial sector is considered as vital in the process of growth of economies both developed and developing. Economists and researchers have sough to investigate the relationship between duo with conflicting and incnclusive results. Hence, in a developing country like Nigeria, the results remains same. Example,  Akinlo (2010) finds a significant positive relationship between development of the financial sector and economic growth. Other studies like Nyong (1997) find a significant negative relationship between finance and economic growth.Therefore, this study seeks to re-examine the relationship between Nigeria’s finance and economic growth using annual time series data from 1981 to 2015. Similarly, it seeks to find out if there exist a structural break in the data and whether it matters in determining the relationship between finance and economic growth.The study finds a signifcant negative relationship between finance and econmic growth after accounting for structural break  and that inclusion of break in the estimated model enhance its performance.The study recommends that future macroeconomic studies should check for breaks and if present be considered in estimation of such models.

https://doi.org/10.31580/apss.v4i3.797
PDF

References

Akinlo, A. E., & Egbetunde, T. . (2010). Financial Development and Economic Growth: The Experience of 10 Sub-Saharan African Countries Revisited. The Review of Finance and Banking, 02(1), 17-28.
Dickey, D. A. F., Wayne A. (1987). Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica: Journal of the Econometric Society, 1057-1072.
Gregory, A. W., & Hansen, B. E. (1996a). Practitioners corner: tests for cointegration in models with regime and trend shifts. Oxford bulletin of Economics and Statistics, 58(3), 555-560.
Gregory, A. W., & Hansen, B. E. (1996b). Residual-based tests for cointegration in models with regime shifts. Journal of econometrics, 70(1), 99-126.
Nyong, M. O. (1997). Capital market development and long-run economic growth: Theory, evidence and analysis. First Bank Review, 4, 13-38.
Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.