relationship. All subsequent studies confirmed it (see for example King and Levine, 1993, and the review in: Pagano, 1993). Goldsmith used a sample of 35 countries for the period between 1860 and 1963 to show the relationship between income and financial depth measured by the ratio between bank's assets and GDP. He also showed that in periods of rapid growth, financial depth grows faster than income. More details about measuring financial depth can be found in this paper. FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH Velimir Šonje

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Financial development and economic growth

The main purpose of this study was to establish the nexus between financial sector development and economic growth in South Africa. The main motivation of the study is that although many studies on this nexus have been carried out in both developed and developing countries very few similar studies have been carried out in Sub-Saharan countries which include South Africa. This has led to the dearth of relevant literature in Sub-Saharan Africa. Cointegration and error correction methodology together with Granger causality tests were used to establish how economic growth and financial sector development are related in South Africa. The results of the study show that economic growth is explained by the financial sector variables (broad money stock as a percentage of GDP and total credit to the private sector as a percentage of GDP) and control variables (inflation, exchange rate, and real interest rates). The Granger causality test results show that there is generally a bidirectional relationship between economic growth and financial sector development which implies that if the economy grows the financial services sector also grows and vice versa. We recommend that more studies using more growth and financial indicators than the ones included in this study need to be carried out using the same methodology applied in this study. In addition, the role of equity markets in economic growth also needs to be investigated.

Financial sector development and economic growth nexus in South Africa

The Nigerian economy has for decades precariously leaned on the fragile leg of crude oil. Consequently, it has
had a checkered growth trajectory driven by the vicissitudes of oil prices. An emerging trend suggests that in the last seven
years the economy was growing without job creation and poverty reduction. Expectedly, attention of scholars had shifted
towards non-oil export as a remedial for this quagmire. This study investigates the specific impact of the non-oil exports to
the growth of Nigerian economy using data between 1981 and 2012.. The study adopted the Augmented Production
Function (APF), employing the Endogenous Growth Model (EGM) in its analysis. The conventional tests for mean
reversion and co-integration were employed. Findings reveal a very weak and infinitesimal impact of non-oil export in
influencing rate of change in level of economic growth in Nigeria. The study, apart from empirically providing information
that has failed to give backing to recent claims of non-oil exports led growth in Nigeria, has also set a data benchmark for
appraisal of possible improvements in future performances of non-oil export trade, with respect to its contributions to the
growth of the Nigerian economy.

Non-oil export and economic growth in nigeria: a time serieseconometric model

Common wisdom generally associates hot money (short-term international capital) with risk in the financial market, while its impact on the uncertainty of the real economy outputs is ignored. Using the Chinese data from 2000 to 2016, we document the aggressive hot money inflows by 2010 and a sudden slow-down afterwards. We find the unidirectional causality from hot money to the industry output, and the bidirectional causality between hot money and the service output. Specifically, with a 1% increase in hot money inflow, there is a 0.29% increase in the industry output and a 0.25% increase in the service output. We further reveal that the short-run variation in hot money flows is the Granger cause of variation in the industry and service outputs, a source of production uncertainty. Moreover, the investigation of six capital-concentrated subsectors provides additional cross-sectional evidence of hot money's heterogeneous effects. Overall, we provide the first empirical evidence on the impact of hot money on the real economy output in China, pointing to a significant risk that volatile hot money flows escalates production uncertainty. These findings lend regulatory insights into risk management and capital control in China.

Hot money flows and production uncertainty: Evidence from China

Export and economic growth in Africa

This paper aimed at examining the impact of Foreign Direct Investment (FDI) and Industrial Sector Performance on economic growth in Nigeria This study utilized annual time series data for the period 1981-2015 using elaborate econometric analysis which tests the sensitivity of GDP to shocks in FDI and Industrial Sector Output, using the Impulse Response Functions (IRFs) and Variance Decomposition (VDC) techniques within a Vector Autoregressive (VAR) framework The Johansen Cointegration test result reveals the absence of a long-run relationship between FDI, Industrial Sector Output and GDP The result also shows the existence of a bidirectional relationship between FDI and Industrial Sector Output, GDP and Industrial Sector Output, with a unidirectional causality running from FDI to GDP The VAR estimate shows that FDI had a slight significant positive impact on GDP, while Industrial Sector Output had a small significant positive impact on GDP at present, with a negative relationship observed at previous periods The impulse response functions clearly reveal that GDP exhibited negative response to shocks in FDI up to the 3rd period, while the effect was positive from the 4th period henceforth, while GDP also exhibited a negative response to shocks in Industrial Sector Output throughout the period observed The variance decomposition analysis further revealed that GDP was mainly driven by shocks in FDI, with industrial sector output contributing very little The study concludes that Nigeria is yet to fully reap the benefit of FDI since its contribution to GDP is still very low at the moment, whilst the contribution of the industrial sectorin the country has not be vibrant enough to spur economic growth The study therefore recommends among other things that social and economic infrastructure be improved as this will help lessen the burden of industrialist and eventually lower the cost of doing business and in turn attract FDI inflow into Nigeria

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Foreign Direct Investment and Industrial Sector Performance: Assessing the Long-Run Implication on Economic Growth in Nigeria

This study examined the causality between non-oil export, financial sector development and economic growth in Nigeria. The study employed credit to private sector, total bank deposit, prime lending rate, market capitalization, money market instruments as proxy to measure financial sector development, while GDP was used to capture economic growth, using annual data from 1985 to 2015. All the variables were stationary at first difference using the Augmented Dickey Fuller (ADF) and Phillip Perron (PP) tests. The Johansen Cointegration test result showed that a long-run relationship between non-oil export, financial sector development and economic growth existed. The Granger causality test indicates that a bi-directional causality runs from total bank deposit, credit to the private sector and market capitalization to economic growth. Also, a unidirectional causality existed between prime lending rate and economic growth. The study shows that out of the five proxy for financial sector development, three showed significant causality with economic growth. These findings therefore imply that a bi-directional relationship exists between financial sector development and economic growth, indicating that a growth in the financial sector will cause same in the economy and vice versa. Finally, the study recommends that the government formulate policies that will enhance credit to the private sector, such as not operating the Treasury Single Account (TSA) Policy in a holistic manner, so that banks will have fund to propel their credit delivery function effectively; considering the fact that the public sector drives the Nigerian economy as it stands now. However for capital market development, investors protection policies should be enhanced in order to strengthen and improve public confidence in the capital market, such as reducing charges for the purchase and sale of securities and reduction of listing requirements for new companies on the exchange.

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Causality between Non-Oil Export, Financial Sector Development and Economic Growth: Evidence from Nigeria

The study investigates the long and short run relationships between broad money supply and real aggregate output (GDP) in Nigeria from 1981 to 2015 This study set to investigate the perplexity whether or not money supply as the major monetary policy measures actually impact on the Nigerian economy This work made use of data of different frequencies (yearly and quarterly) in order to reveal some hidden facts that data of the same frequency might fail to show An unrestricted version of Mixed Data Sampling (U-MIDAS) technique and Autoregressive Distributed Lag (ARDL) technique were employed The ADF unit root test revealed that the yearly real GDP and quarterly broad money supply contained a unit root and this permit the testing of cointegration among the variables The U-MIDAS results affirm the existence of a long and shortrun relationship between yearly real GDP and quarterly broad money supply at different season while the ARDL result affirm that money supply impacted significantly on real GDP in the long run only The study concluded that the disequilibrium correction terms from the two analytical approaches showed the evidence that there is a tendency for growth targeting in Nigeria which is one of the major objectives of Nigeria economy though at a slower rate It was therefore recommended that monetary authority should maintain the level of inflation targeting in the economy and the volume of money to be supply should be monitored as too much money supply in the economy will lead to skyrocketing inflation and also the periodic money multiplier should be made efficient by supplying the money into the circulation regularly so as to co-trend with the real GDP growth by making cash available for business transactions and other economic activities, this will by means improve the real GDP of Nigeria economy

The Impact of Money Supply on Nigeria Economy: A Comparison of Mixed Data Sampling (MIDAS) and ARDL Approach

DOI: http://dx.doi.org/10.24018/ejbmr.2020.5.1.129 1 Abstract— This paper examines the impact of banks credit and macroeconomic dynamics on Small and Medium Scale Enterprises in Nigeria using annual data from 1992 – 2016. The long-run and short-run relationship amongst the variables were examined via the non-linear ARDL model. The Augmented Dickey Fuller (ADF) and Philip Perron’s (PP) test reveals that none of the variables were I(2). The Bounds test to cointegration confirms the existence of a long-run relationship. The non-linear ARDL results suggests that in both long and short-run estimations, that a rise in banks credit, government tax revenue and negative shocks in interest rate, inflation rate and exchange rate will trigger a fall in SMEs performance in Nigeria. Furthermore, it was observed that negative shocks tend to be larger in magnitude than positive ones. This study therefore recommends amongst others, that loans to the small and medium enterprises (SMEs) sector be monitored properly, so as to ensure that such loans are not channelled to other purposes.

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Banks Credit, Macroeconomic Dynamics and the Performance of Small and Medium Scale Enterprises in Nigeria: A Non-Linear ARDL Approach

Banks credit and manufacturing sector performance in nigeria: a comparison of autoregressive distributed lag (ardl) and vector error correction model (vecm) approach

Gamaliel O. Eweke

Papers

Foreign Direct Investment and Industrial Sector Performance: Assessing the Long-Run Implication on Economic Growth in Nigeria

Causality between Non-Oil Export, Financial Sector Development and Economic Growth: Evidence from Nigeria

The Impact of Money Supply on Nigeria Economy: A Comparison of Mixed Data Sampling (MIDAS) and ARDL Approach

Banks Credit, Macroeconomic Dynamics and the Performance of Small and Medium Scale Enterprises in Nigeria: A Non-Linear ARDL Approach

Banks credit and manufacturing sector performance in nigeria: a comparison of autoregressive distributed lag (ardl) and vector error correction model (vecm) approach