FINANCIAL DEVELOPMENT, GLOBALISATION AND ECONOMIC GROWTH IN NIGERIA

ABSTRACT

Due to the increasing role of financial development (FD) and globalisation in economic growth over the decades and the current economic situation in Nigeria, investigating the contributions of FD and globalisation as well as their joint effect on economic growth, is very important for policymakers to formulate policies that can maximise their benefits for economic growth. Therefore, this study delves into the individual impacts of FD and globalisation, as well as their combined impact on economic growth in Nigeria. The study employed the ARDL model as well as FMOLS and Canonical Cointegration Regression (CCR) to analyse data from 1980 to 2023. The results from ARDL, FMOLS and CCR show that FD does not promote economic growth in Nigeria. Similarly, the study found that globalisation hinders Nigeria’s economic growth. On the interaction term, the study found that globalisation enhanced the effect of FD on economic growth. It was also found that the labour force stimulated economic growth, while physical capital negatively impacted economic growth in Nigeria. Therefore, this study calls for policies on globalisation and the financial sector that will enable both to contribute optimally to the desired economic growth.