Does Financial Innovation Drive Growth? Empirical Analysis of the Nigerian Case
Journal Title: Journal of Economics, Management and Trade - Year 2017, Vol 16, Issue 3
Abstract
The goal of this study is to examine the effectiveness of financial innovation in driving growth in Nigeria using quarterly data from 2009:Q1-2014:Q4. The Least Squares (Gauss-Newton/Marquardt steps) based on vector autoregressive (VAR) system was used to estimate our system model whereas Johansen cointegration test was utilized to test for long-run relationship among our series. The Augmented Dickey-Fuller unit root test, descriptive statistics and diagnostic tests were also employed. The results showed that there is a long-run relationship between growth and financial innovation. The findings indicate that financial technological innovations (ATM transactions, Web/internet transactions, POS services and Mobile payments) do not jointly have positive effect on growth. However, the responsiveness of growth to the individual innovation channels varied. Value of transactions via ATM, the internet and mobile payments all have relative positive effect on growth, with the exception of POS channel which exerted a negative influence on growth. We therefore conclude that financial technological innovation has not had the desired effect on the Nigerian economy. This may be due to the fact that these innovative channels are yet to have significant depth required to drive growth. However, we recommend that investment in financial innovation be intensified, and must be accompanied with mass literacy which will aim at educating the citizenry on the need and benefits of effecting financial transactions through the various financial innovation channels. Effective regulations and adequate monitoring are very critical in ensuring security and healthy competitiveness in this area. Going forward, the positive effect of financial innovation will begin to be felt in real terms.
Authors and Affiliations
I. G. Okafor, Ezeaku Hillary Chijindu, Anyalechi Kenneth Chikezie
Keywords
Related Articles
- EP ID EP319969
- DOI 10.9734/BJEMT/2017/30809
- Views 80
- Downloads 0
Strategic Agility and Competitive Advantage: Exploration of the Ontological, Epistemological and Theoretical Underpinnings
This paper aims and seeks to explore the question of ontological and epistemological foundations of the major constructs in the study – strategic agility and competitive advantage - by reviewing relevant literature on re...
Does Financial Innovation Drive Growth? Empirical Analysis of the Nigerian Case
The goal of this study is to examine the effectiveness of financial innovation in driving growth in Nigeria using quarterly data from 2009:Q1-2014:Q4. The Least Squares (Gauss-Newton/Marquardt steps) based on vector auto...
Cognitive Analysis and Modeling of Innovation Potential
Aim: The main aim of the research is to develop cognitive model for innovation potential evaluation. Study Design: Empirical research of financial, statistic and management reports of enterprises dated 2012 and 2015, an...
Effect of Presidential Cassava Transformation Initiative on the Efficiency of Micro-scale Cassava Processing Enterprises in Southwest Nigeria
This study appraised the effect of 2003 Presidential Cassava Transformation Initiative (PCTI) on the efficiency of Micro-Scale Cassava Processing Enterprises in Southwest Nigeria. The study was carried out between April...
Interest Rate and Investment in Money Market Instruments in a Developing Economy: A Case of Nigeria
The relationship between interest rate and investment has been a largely discussed and controvertible one across different economic climes. It is in the light of this that this work was set out to investigate the influen...