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The state's role in promoting Nigerian financial development and economic growth

International Journal of Social Economics, 06 May 2014, Vol.41(5), pp.380-396 [Peer Reviewed Journal]

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  • Title:
    The state's role in promoting Nigerian financial development and economic growth
  • Author: Chidozie Uzonwanne, Godfrey
  • Found In: International Journal of Social Economics, 06 May 2014, Vol.41(5), pp.380-396 [Peer Reviewed Journal]
  • Subjects: Economics ; Social Economics ; Development ; Institutions and Institutional Analysis ; Social Policy ; Political Economics ; History of Political Economic Thought ; Interest and Pressure Groups ; Economics
  • Language: English
  • Description: Purpose – The purpose of this study is to propose a framework for conceptualizing the finance-growth theory in developing economies. Design/methodology/approach – The study uses a cointegration and error correction model to investigate the possible influence of key socio-political characters of a state on the causal relationship between financial development and economic growth. A developing economy (Nigeria) which had experienced decades of autocratic military governance was studied. Three characters of the state (ethnicity, civil war and military governance) were derived from a historical review and were introduced into the cointegration analysis as dummy variables. Findings – Evidence of a causal relationship was found to exist from financial development to economic growth and the characters of the state were found to have no significant impact on this relationship. Research limitations/implications – The research limitations were based on the reliability of data recorded between 1960 and 2007. Practical implications – This study is practical from the point of view of the integration of qualitative social disturbances into a quantitative model targeted at exploring the practical developmental impact these disturbances may have had and continue to have on economic growth. Social implications – The social implication of this study stems from the impact that adverse socio-political influences may have on financial development and economic growth. Originality/value – This is an original piece of research focused at understanding the unique social, political and macroeconomic circumstance of a strategically relevant developing economy.
  • Identifier: ISSN: 0306-8293 ; E-ISSN: 1758-6712 ; DOI: 10.1108/IJSE-04-2013-0088

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