DOES FINANCIAL STRUCTURE DEVELOPMENT DRIVE ECONOMIC PERFORMANCE? THEORETICAL AND EMPIRICAL EVIDENCE FROM NIGERIA
Journal Title: European Journal of Business and Social Sciences - Year 2014, Vol 2, Issue 11
Abstract
The paper questions the extent to which financial structure development theoretically and empirically drives economic performance in Nigeria. It adopts mixed methodological framework to tease out the relationship between financial structure development and economic performance. In terms of theoretical exploration, the paper recognizes the critical nature of the financial system and outlines it role in driving economic growth. This paper integrates Bwire and Musiime (2006) and Ajadi Adegbite and Ajadi (2008) models to develop an alternative model that fits into the reality of Nigerian financial and economic environment. The study relies on secondary data and ordinary least square method to analyze the relationship between financial structure development and economic performance. The paper discovers that financial system is necessary for economic performance but outline some policy issues which distorted the potency and significant posture of the financial system in accelerating economic performance in Nigeria. The main contribution of this paper to knowledge lies on its robust engagement with debates on financial structure development and the link between finance and economic growth. This knowledge enhances our understanding about diverse models which shape financial development in theory and practice. In conclusion, the paper highlights pragmatic policy implications which will facilitate better relationship between financial systems and economic performance in Nigeria.
Authors and Affiliations
Ibrahim A. O. BAKARE| (Corresponding Author) Department of Economics, Faculty of Social Sciences, Ojo(Main Campus), P.M.B. 001, LASU Post Office, Ojo Campus, Lagos Tel: +2347083965178/E-mail: bakgiit@yahoo.com, Ayo Dele Awotundun| Department of Banking and Finance Faculty of Management Sciences, Lagos State University, Olawale R. Shabi| Department of Industrial Relation and Public Administration Faculty of Management Sciences, Lagos State University
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