Financial Development and Manufacturing Output Growth Nexus in Nigeria: The Role of Institutional Quality

DBN Journal of Economics and Sustainable Growth, Vol. 1 Issue 2, pp. 1-43

43 Pages Posted: 27 Feb 2019

See all articles by Alarudeen Aminu

Alarudeen Aminu

University of Ibadan - Department of Economics

Isiaka Akande Raifu

Department of Economics, Faculty of Economics and Management Sciences, University of Ibadan, Ibadan, Oyo State, Nigeria

Bolanle Deborah Oloyede

Dapartment of Economics, Faculty of Economics, University of Ibadan, Ibadan, Oyo State, Nigeria

Date Written: January 16, 2019

Abstract

This study examines the mediating role of institutional quality in the relationship between financial development and manufacturing output in Nigeria during the period from 1984 to 2016. To achieve this objective, autoregressive distributed lag method (ARDL) is used to determine the short-run and long-run effects of financial development and that of its interaction with institutional quality indicators (democratic accountability, bureaucratic quality and control of corruption) on manufacturing output. The findings show that financial development contributes positively to manufacturing output in the long-run. However, this contribution is moderated downwards by institutional quality indicators. Against the background of the findings, it is recommended that government should develop a policy framework that will allow for a proper integration of financial sector with what goes on in the manufacturing sector and that government should also encourage some sort of harmonious working relationship among relevant institutions in both sectors for the development of manufacturing sector.

Keywords: Financial Development, Manufacturing Output, Institutional Factors, ARDL

JEL Classification: G20, O14, O43, C22

Suggested Citation

Aminu, Alarudeen and Raifu, Isiaka Akande and Oloyede, Bolanle Deborah, Financial Development and Manufacturing Output Growth Nexus in Nigeria: The Role of Institutional Quality (January 16, 2019). DBN Journal of Economics and Sustainable Growth, Vol. 1 Issue 2, pp. 1-43, Available at SSRN: https://ssrn.com/abstract=3332385

Alarudeen Aminu

University of Ibadan - Department of Economics ( email )

OK

Isiaka Akande Raifu (Contact Author)

Department of Economics, Faculty of Economics and Management Sciences, University of Ibadan, Ibadan, Oyo State, Nigeria ( email )

Ibadan
+2348069829396; +234802297508 (Phone)

Bolanle Deborah Oloyede

Dapartment of Economics, Faculty of Economics, University of Ibadan, Ibadan, Oyo State, Nigeria ( email )

Ibadan
Nigeria
+2349038936381 (Phone)

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