Aug 2026· International Journal of Economics and Financial Management· 0 citations
Abstract
This study examines the relationship between financial deepening and output in Nigeria using 56
quarterly observations from 2012Q1 to 2025Q4. The supplied dataset contains current-value
naira series for gross domestic product (GDP), Point-of-Sale (POS) transactions, mobile
payments, and credit to the private sector (CPS). Consequently, the dependent variable measures
nominal output rather than real economic growth. All series were transformed into natural
logarithms. Seasonal augmented Dickey-Fuller tests show that the four log-level series are non
stationary but become stationary after first differencing. A stationary seasonal distributed-lag
model was therefore estimated in quarterly log changes, with lagged financial variables, a four
quarter output-growth term, quarterly effects, a trend, a COVID-19 intervention dummy, and a
2025Q1 data-discontinuity control. Newey-West heteroskedasticity- and autocorrelation
consistent standard errors were used. Lagged POS growth, mobile-payment growth, and CPS
growth are individually insignificant, and they are jointly insignificant (F = 0.769, p = 0.518).
The results do not support the earlier claim that the three financial-deepening indicators exert
positive and significant short-run and long-run effects on economic growth. A defensible real
growth analysis requires real GDP and consistently deflated financial variables.
This study investigates the dynamic relationship between financial deepening and economic growth in Nigeria using an Error Correction Specification (ECS) framework. Motivated by the persistent disconnect between financial sector reforms and real sector productivity, the research employs time-series data covering 1980-2024. Methodologically, the study utilizes Augmented Dickey-Fuller and Phillips-Perron unit root tests, Johansen multivariate cointegration, pairwise Granger causality tests, and a Parsimonious Error Correction Model (PECM). The empirical findings provide robust support for the supply-leading hypothesis, revealing unidirectional causality from financial deepening proxies specifically broad money supply ratio (M2Y) and private sector credit (PRIVY) to economic growth. The Johansen cointegration results confirm a stable, long-run equilibrium relationship among variables, while the significant error-correction term indicates a steady annual convergence rate toward equilibrium following short-run shocks. Furthermore, while short-term monetary adjustments exhibit transient frictions, long-run estimates underscore that sustained financial depth and capital stock accumulation significantly enhance economic performance. Conversely, unmanaged population pressures and structural credit bottlenecks continue to hinder optimal output. The study concludes that financial deepening is a vital catalyst for Nigerian development, provided qualitative credit allocation and institutional efficiency are optimized. Policy recommendations emphasize targeted credit to productive sectors, enhanced asset quality management, and strategic infrastructure investment to transform financial depth into inclusive economic expansion.
C. O. Ibidapo· International Journal of Hum...· 0 citations
This study examined the effect of financial distortions on economic growth in Nigeria from 1990
to 2024, using time series data sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin
and the National Bureau of Statistics (NBS). An ex post facto research design was adopted,
focusing on four key indicators of financial distortion: interest rate spread (IRS), parallel market
exchange rate premium (PMERP), credit to the private sector (CPS), and cash reserve requirement
(CRR), with real gross domestic product (RGDP) as the proxy for economic growth. The
methodology involved the Augmented Dickey-Fuller unit root test for stationarity, diagnostic tests,
and Ordinary Least Squares (OLS) multiple regression analysis using EViews 10.0.The regression
results revealed that IRS and CPS had significant positive effects on RGDP, with coefficients of
0.0835 (p = 0.0126) and 0.2998 (p = 0.0004), indicating that moderate interest rate spreads and
increased credit access supported growth. Conversely, PMERP had a significant negative effect
(coefficient = -0.0095, p = 0.0201), suggesting that exchange rate divergence hindered growth.
CRR showed a negative but statistically insignificant effect on RGDP (p = 0.3572), indicating
limited direct impact during the period. The findings aligned with Financial Repression Theory
and supported existing empirical studies, emphasizing the importance of sound macro-financial
policies. The study recommended expanding credit to the private sector, stabilizing exchange rates,
and managing interest rate spreads. It contributed to the literature by offering a long-term
empirical assessment of financial distortions in Nigeria and provided policy guidance for
sustainable economic development.
Honour Diebogheneruo Onerhime· International Journal of Eco...· 0 citations
This study examines the dynamics of asset quality across all twelve Indian public-sector banks
(PSBs) over fiscal years 2011–2026, using a merger-consistent (pro-forma) panel of 192 bankyears constructed from Reserve Bank of India (RBI) data and bank disclosures. The empirical
workhorse is deliberately simple: the canonical non-performing-loan (NPL) determinants panel,
in which the gross non-performing-asset (GNPA) ratio is regressed on its own lag, real GDP
growth, the ten-year government-bond yield, and lagged credit growth, with bank fixed effects
and standard errors clustered by bank. Three findings emerge. First, asset quality is highly
persistent: the autoregressive coefficient is about 0.71 with the full set of controls—implying a
half-life of roughly two years—and is robust to adding year fixed effects and to excluding the
pandemic years. Second, the relationship between GNPAs and the macroeconomy is not
structurally stable: interest rates matter, but the coefficient on GDP growth is weak and wrongsigned in the pooled panel, and when the identical regression is estimated separately before and
after the AQR the GDP coefficient collapses from +1.20 to zero—evidence that the 2016 surge
was a supervisory recognition event rather than a business-cycle effect. Third, a transparent,
calibrated stress test—reconciled to the RBI June 2026 Financial Stability Report—finds that all
twelve banks remain above the eight-per-cent CET1 prompt-corrective-action floor even under a
severe five-percentage-point GDP contraction, with the asset-weighted GNPA ratio rising from
1.94 to 3.93 per cent. Cross-sectionally, the stressed-capital ranking is governed by starting
capital and bank size rather than current asset quality.
Mihir Khanna· International Journal of Soc...· 0 citations
This study examines whether the accumulated stock of private credit provides early-warning information for subsequent deterioration in banking-sector asset quality. It combines annual Passport banking indicators with World Development Indicators for 58 countries over 2010–2024; the preferred sample contains 746 country–year observations. A second-order dynamic fixed-effects model links log(1 + NPL), where NPL denotes the non-performing loan ratio, to lagged private credit to gross domestic product (GDP), real credit growth, lending rates, bank capital, GDP growth, inflation, and unemployment. Its preferred credit-depth coefficient is 0.00377, implying that a 10-percentage-point increase is associated with approximately 0.15 percentage points more NPLs one year later at the sample median. To operationalize early-warning calibration without claiming a universal cutoff, the paper reports the sample credit-depth quartiles and estimates a country fixed-effects linear probability model using the European Banking Authority’s 5% gross-NPL supervisory trigger. In that alternative outcome, a 10-percentage-point increase in credit depth is associated with a 2.78-percentage-point higher conditional probability of NPLs reaching 5% or more (p = 0.002). On a strictly common 609-observation sample, the credit-depth coefficients at one-, two-, and three-year horizons are 0.00501, 0.00960, and 0.01266. Lending rates and unemployment are positive, whereas annual credit growth and capital ratios are not robust predictors. Pooled interactions do not reject equal slopes across broad country partitions. System generalized method of moments (GMM) passes conventional tests but violates a persistence-bound credibility check. The evidence supports an early-warning interpretation, not a causal claim.
Marco Antonio Ledesma Munive, Alejandro Anibal Aguirre-Rojas, Graciela Soledad Verastegui Velasquez et al.· Journal of Risk and Financia...· 0 citations
This study empirically investigated the relationship between financial inclusion and three critical
dimensions of macroeconomic performance in Nigeria, inflation, aggregate investment, and real
gross domestic product (GDP) in Nigeria over the period 2010Q1 to 2025Q4. Drawing on
quarterly time series data sourced from the Central Bank of Nigeria (CBN), the National Bureau
of Statistics (NBS), and the World Bank, the study employed Autoregressive distributed lag
(ARDL) model as estimation method, applied to three distinct but interrelated models: inflation –
investment - real gross domestic product models. The findings revealed that credit to the private
sector, microcredit volume, ATM density, mobile transaction values, and deposit mobilization
exerted statistically significant influences on inflation, investment formation, and real output
growth. Specifically, deeper financial inclusion contributed to moderate inflation control,
stimulated capital formation through SME financing and mobile banking penetration, and
accelerated real GDP growth via domestic savings mobilization and broadened credit access.
The study concluded that there is the need to integrate financial inclusion targets within the
broader monetary and fiscal policy frameworks in Nigeria. And therefore, recommended
amongst other things, that strengthening the regulatory framework for mobile money operators
to encourage competitive pricing and deepen the adoption of cashless transactions; and
channeling a greater share of CBN intervention funds toward microcredit institutions that serve
agricultural households and informal sector operator would address both the depth and the
geographic breadth of financial inclusion to yield dividends for price stability, capital formation,
and long-run output growth across Nigeria.
Emmanuel Disi· International Journal of Eco...· 0 citations
The study examines the relationship between financial dollarization and macroeconomic development in the Commonwealth of Independent States (CIS). Most previous studies have examined the drivers of dollarization, inflation trends, exchange-rate arrangements, and financial stability outcomes. Far less attention has been given to how dollarization relates directly to economic growth.
The present analysis contributes to this area by investigating whether lower levels of financial dollarization coincide with higher GDP growth in CIS countries. The study employs a longitudinal panel dataset covering ten CIS countries during 2010 -2023. Data were collected from the World Bank, International Monetary Fund, Transparency International, and national central banks. Annual GDP growth was used as the indicator of macroeconomic development, while financial dollarization was measured through the share of foreign-currency deposits and loans in the banking system. The empirical analysis applied pooled ordinary least squares, random-effects, and fixed-effects panel regression models, supplemented by diagnostic and robustness tests.
The results indicate a statistically significant negative relationship between financial dollarization and economic growth. Higher levels of foreign-currency dependence were associated with lower GDP growth rates across all model specifications. Results from the preferred fixed-effects specification indicate that a one-percentage-point rise in financial dollarization is associated with lower GDP growth after accounting for inflation, trade openness, institutional quality, and exchange-rate volatility. The findings also suggest that stronger government effectiveness and greater trade openness support economic performance, while higher inflation and increased exchange-rate volatility are linked to weaker growth outcomes.
The findings indicate that lower reliance on foreign-currency deposits and loans is associated with stronger macroeconomic performance within the estimated panel framework. However, the observational design does not permit strong causal inference regarding the direction of this relationship. The results provide evidence relevant to monetary authorities seeking to reduce financial dollarization and enhance confidence in domestic currencies across the CIS region.
A. Sembekov, A. Ayulov, Rakymzhan K. Yelshibayev et al.· Frontiers in Political Scien...· 0 citations
