scholarly journals Financial Sector Reform and the Growth of Nigerian Economy: 1986-2015

2017 ◽  
Vol 2 (2) ◽  
pp. 31
Author(s):  
R.I. Umejiaku ◽  
Ezie Obumneke
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Financial Sector ◽  
Sector Reform ◽  
Correction Model ◽  
Deposit Rate ◽  
Enabling Environment ◽  
Long Run ◽  
Financial Sector Reform ◽  
The Right

The study investigates the effectiveness of financial sector reforms towards the growth of Nigerian economy from 1986 to 2015 using error correction model approach. The long-run pre-estimation tests revealed that there is long-run relationship between financial sector reform and the economic growth in Nigeria. Findings from the study showed that consistent fall in real deposit rate had engineered the mobilised credit that was invested in the economy; little wonder none of the determinants coefficient was significant. The fact that the real deposit rate has the right sign though statistically insignificant shows that given an enabling environment devoid of inflation; it could encourage savings and probably economic growth. The right sign of the credit to the private sector is equally encouraging investment – proxied by ratio of private sector credit to Gross Domstic Product (GDP) which leads one to wonder where the resources have gone. The study thus recommends that an enabling environment devoid of discouraging inflation must be provided and the financial institutions must be seem to be acting also for the interest of the economy.

scholarly journals The Causality between Foreign Direct Investment and Economic Growth in Botswana: A Multivariate Analysis

2019 ◽  
Vol 1 (1) ◽  
pp. 8
Author(s):  
Erasmus L Owusu
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Private Sector ◽  
Direct Investment ◽  
Trade Openness ◽  
Infrastructure Development ◽  
Investment Climate ◽  
Correction Model ◽  
Long Run ◽  
Domestic Savings

<p><em>The paper empirically investigates the short and long-run causal relationship between</em> <em>foreign direct investment, credit to the private sector, trade openness, gross national expenditure and economic growth in Botswana. In doing this, the paper employs multivariate Granger-Causality within an ARDL-bounds approach to co-integration and unrestricted error correction model (UECM). The paper finds that FDI inflow does not spur economic growth but rather, it is economic growth which promotes FDI inflow, credit to the private sector, trade and national expenditure. However, the paper finds</em> <em>a bi-directional relationship between FDI inflow and credit to the private sector both in the short and the long runs. Thus, policies should be targeted at improving the investment climate for existing domestic and foreign investors through infrastructure development and that external capital inflow should be complemented by domestic savings and investors on other to boost economic growth in Botswana.</em></p>

ANALISIS PENGARUH EKSPOR TERHADAP PERTUMBUHAN EKONOMI INDONESIA

2017 ◽  
Vol 11 (1) ◽  
pp. 1-20
Author(s):  
Ari Mulianta Ginting
Keyword(s):  
Economic Growth ◽  
Export Performance ◽  
Descriptive Analysis ◽  
Correction Model ◽  
Administration System ◽  
Long Run ◽  
Short Run ◽  
Available Information ◽  
Increasing Trends ◽  
The Relationship

Ekspor merupakan salah satu faktor terjadinya peningkatan pertumbuhan ekonomi suatu negara, sejalan dengan hipotesis export-led growth (ELG). Penelitian ini menganalisis perkembangan ekspor dan pertumbuhan ekonomi Indonesia periode kuartal I 2001 sampai dengan kuartal IV 2015. Penelitian ini menggunakan analisis deskriptif dalam menggambarkan perkembangan pertumbuhan ekonomi serta ekspor dan analisis kuantitatif metode Error Correction Model (ECM) dalam menganalisis efek jangka panjang dan jangka pendek dari ekspor terhadap pertumbuhan ekonomi. Pada periode penelitian, data yang ada menunjukkan bahwa ekspor dan pertumbuhan ekonomi Indonesia sama-sama mengalami peningkatan. Hasil regresi ECM menunjukkan bahwa ekspor memiliki pengaruh yang positif dan signifikan secara statistik terhadap pertumbuhan ekonomi Indonesia, yang mendukung hipotesis bahwa ELG berlaku untuk Indonesia. Berdasarkan hasil penelitian ini, maka untuk mendorong pertumbuhan ekonomi Indonesia diperlukan peningkatan kinerja ekspor Indonesia. Peningkatan kinerja ekspor Indonesia dapat dilakukan dengan berbagai cara, salah satunya adalah dengan perbaikan sistem administrasi ekspor, peningkatan riset dan pengembangan produk Indonesia, peningkatan sarana dan prasarana infrastruktur, stabilitas nilai tukar dan perluasan pasar non tradisional, termasuk perbaikan struktur ekspor komoditas. Export is one of the factors behind the economic growth which is in line with the export-led growth hypotesis (ELG). This research analyzes the relationship between economic growth and export of Indonesia during first quarter of 2001 until fourth quarter of 2015. It employs descriptive analysis to describe export movement and economic growth during the study period and ECM model to analyze the long run and the short run effects of export on the economic growth. The available information indicated that, during the study period, both export and economic growth showed similar increasing trends. The result of the ECM model revealed that export had a positive and statistically significant relationship with the economic growth, supporting the hypotesis of ELG in Indonesia. Hence, to accelerate economic growth, efforts are required to boost the export performance in Indonesia. The Export performance can be increased by several way, such as improving the export administration system, increasing the research and development of Indonesian products, improving the facilities and infrastructure, exchange rate stability and the non-tradisional markets expansion, and including improvement of the export commodity structure.

Hypothesis testing with error correction models

2021 ◽  
pp. 1-9
Author(s):  
Patrick W. Kraft ◽  
Ellen M. Key ◽  
Matthew J. Lebo
Keyword(s):  
Hypothesis Testing ◽  
Error Correction ◽  
Null Hypothesis ◽  
Alternative Hypothesis ◽  
Correction Coefficient ◽  
Correction Model ◽  
Long Run ◽  
Independent Variable ◽  
The Right ◽  
General Error

Abstract Grant and Lebo (2016) and Keele et al. (2016) clarify the conditions under which the popular general error correction model (GECM) can be used and interpreted easily: In a bivariate GECM the data must be integrated in order to rely on the error correction coefficient, $\alpha _1^\ast$ , to test cointegration and measure the rate of error correction between a single exogenous x and a dependent variable, y. Here we demonstrate that even if the data are all integrated, the test on $\alpha _1^\ast$ is misunderstood when there is more than a single independent variable. The null hypothesis is that there is no cointegration between y and any x but the correct alternative hypothesis is that y is cointegrated with at least one—but not necessarily more than one—of the x's. A significant $\alpha _1^\ast$ can occur when some I(1) regressors are not cointegrated and the equation is not balanced. Thus, the correct limiting distributions of the right-hand-side long-run coefficients may be unknown. We use simulations to demonstrate the problem and then discuss implications for applied examples.

Enhancing Economic Growth and Government Revenue Generation in Nigeria: The Role of Diaspora Remittances

2021 ◽  
pp. 003464462110256
Author(s):  
Dal Didia ◽  
Suleiman Tahir
Keyword(s):  
Economic Growth ◽  
Parameter Estimates ◽  
Gross Domestic Product Growth ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
The Empirical Analysis

Even though remittances constitute the second-largest source of foreign exchange for Nigeria, with a $24 billion inflow in 2018, its impact on economic growth remains unclear. This study, therefore, examined the short-run and long-run impact of remittances on the economic growth of Nigeria using the vector error correction model. Utilizing World Bank data covering 1990–2018, the empirical analysis revealed that remittances hurt economic growth in the short run while having no impact on economic growth in the long run. Our parameter estimates indicate that a 1% increase in remittances would result in a 0.9% decrease in the gross domestic product growth rate in the short run. One policy implication of this study is that Nigeria needs to devise policies and interventions that minimize the emigration of skilled professionals rather than depending on remittances that do not offset the losses to the economy due to brain drain.

International Trade and Economic Performance in Tanzania: Further Evidence

2021 ◽  
pp. 1-17
Author(s):  
Ally A. L. Kilindo
Keyword(s):  
Economic Growth ◽  
International Trade ◽  
Economic Performance ◽  
Trade Restrictions ◽  
Correction Model ◽  
Spurious Regression ◽  
Long Run ◽  
Reform Period ◽  
Manufactured Goods

Abstract The study investigated the role of international trade in economic performance in Tanzania for the post reform period, from 1980 to 2018. International trade is measured by disaggregated imports and exports while economic performance is measured by GDP growth. Exports are disaggregated into manufactured goods and non-manufactured goods while imports are disaggregated into capital goods and intermediate goods. To obtain robust non-spurious regression results, Dickey-Fuller (D-F) and Phillips-Peron (PP) Unit Root tests were performed. Johansen Co-integration tests were employed to investigate long-run relationships between export, imports and economic growth. The Johansen test suggested a long-run relationship between international trade and its components and economic development. In addition, the Error Correction Model (ECM) results further supported a long-run relationship between international trade and economic growth in Tanzania. This calls for further opening of the economy and further liberalisation of trade restrictions.

Financial Deepening, Financial Intermediation and Nigerian Economic Growth: Time Variant Analysis

2019 ◽  
pp. 60-73
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Private Sector ◽  
Money Supply ◽  
Domestic Product ◽  
Financial Deepening ◽  
Causality Test ◽  
Real Gross Domestic Product ◽  
Long Run

This study examines financial deepening, financial intermediation and Nigerian economic growth. The main purpose is to examine the relationship between financial deepening and Nigerian economic growth while the specific objectives are to examine the impact of interest rate, capital market development, rational savings, credit to private sector and broad money supply on the growth of Nigerian. Secondary data of the variables were sourced from the publications of Central Bank of Nigeria (CBN) from 1981-2017. Nigerian Real Gross Domestic Product (RGDP) was used as dependent variable while Broad money supply (M2), Credit to Private Sector (CPS), National Savings (NS), Capital Market Capitalization (CAMP) and Interest Rate (INTR) was used as independent variables. Multiple regressions with E-view statistical package were used as data analysis techniques. Cointegration test, Augmented Dickey Fuller Unit Root Test, Granger causality test was used to determine the relationship between the variable in the long-run and short-run. R2, F – statistics and β Coefficients were used to determine the extent to which the independent variable affects the dependent variable. It was found from the regression result that Broad Money Supply, credit to private sector have position effect on the growth of Nigerian Real Gross Domestic Product while National Savings, Capitalization and Interest Rate on Nigeria Real Gross Domestic Product. The co-integration test revealed presence of long-run relationship among the variables, the stationary test indicated stationarity of the variables at level. The Granger Causality Test found bi – variant relationship from the dependent to the independent and from the independent to the dependent variables. The regression summary found 99.0% explained variation, 560.5031, F – statistics and probability of 0.00000. From the above, the study concludes that financial deepening has significant relationships with Nigerian economic growth. We recommend that government and the financial sector operators should make policies that will further deepen the functions of the financial system to enhance Nigerian economic growth.

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