The Cashless Policy and Foreign Direct Investment in Nigeria: A Vector Error Correction Model (VECM) Approach
Journal Title: International Journal of Financial Economics - Year 2014, Vol 2, Issue 2
Abstract
The study undertakes an econometric research to analyze the cashless policy and its effectiveness on attracting foreign direct investment in Nigeria using quarterly data of 2006 to 2012. The log linear vector error correction model (VECM) was adopted to examine how automated teller machine (ATM), interbank transfer (IBT) and Mobile money (MM) had impacted on foreign direct investment (FDI). Unit root test was carried out on each of the variables to determine their level of stationarity. They were however found stationary after first difference and then used for the regression analysis. From the various regression results, we find out that the cointegration test confirmed the existence of long run relationship among the variables, while the granger causality shows a bi-directional relationship where IBT and MM was said to granger cause FDI in Nigeria. In the VECM model result, all the explanatory variables are positive and significant meaning that they all contribute positively to the increase in FDI in the country. The study recommends that the use of ATM, IBT and MM should be much more encouraged in Nigeria, with proper awareness on its benefit. Also effective policy needs to be developed by the government through the CBN to ensure the effectiveness and efficiency of ATM, IBT and MM.
Authors and Affiliations
Ezie Obumneke, Adeniji Sesan Oluseyi, Oniore Jonathan Ojarikre
Keywords
Related Articles
- EP ID EP27256
- DOI -
- Views 373
- Downloads 9
An Explanatory Study of Women Entrepreneurs: The Key Success Factors to Start-up a Micro Business
The purpose of this paper is to examine the key success factors to start-up a micro business. This study has been limited for women entrepreneurs in micro business, who graduated from Entrepreneurship Short Courses (ES...
Divisia Monetary Aggregates and Demand for Money in Nigeria
The Nigerian financial system has undergone several transformations over the past few decades leading to financial innovations. These innovations have altered the definition and use of monetary aggregates as a monetary...
Volatility Transmission among Macroeconomic Variables, Gold Return, Stock Return, Oil Return and Exchange Rate Return: Evidence from Pakistani Economy
This study employed GARCH and TGARCH models to examine the volatility transmission and asymmetry of information on volatility among macroeconomic variables in Pakistan for the period 2000 to 2010 monthly data. GARCH mo...
Post-Merger Analysis of the Financial Performance of SG SSB
The study focused on the post merger analysis of the financial performance of SG-SSB. Data for a ten year period from 2004 to 2013 was used to analyse the financial performance. The analysis and discussion of the data...
The Financial Determinants of Private Investment in Ghana
This paper examines the financial determinants of private investment in Ghana using annual time series data from 1970 to 2010. Based on the autoregressive distributed lag (ARDL) bounds testing procedure to cointegratio...