This empirical study examined the factors affecting the contribution of financial institutions to... more This empirical study examined the factors affecting the contribution of financial institutions to national output in Nigeria between 1988 and 2007. The central focus is that a high level of financial variables is a necessary condition for accelerating growth in an economy. This is because of the central role of the financial institutions in mobilizing savings and allocating same for the development process. The study made use of secondary data, sourced for a period of 20 years. I specified three explanatory variables for the study based on theoretical underpinnings. I sought to establish a relationship between these variables and growth index (Gross Domestic Product). The ordinary least least squares analytical framework and the Johansen co-integration test was used in the analysis. A descriptive analysis was also done in the study. At the end of the study, I found that the three explanatory variables, as a whole were useful and had a statistical relationship with output . The empirical test indicates that, these variables satisfied the apriori expectation and are statistically significant. Thus it was concluded and recommended that, the financial market remain one of the mainstream in every economy that has the power to influence economic growth, hence the organize private sector is encourage to invest in it. This will enable the markets improve its illiquidity status for economic growth and development. Therefore the government must contribute in order to achieve these objectives through investing government securities in productive sectors and relaxing laws that spell threat to the financial institutions.
The banking sector in Nigeria have continuously struggled to make their shareholders happy by jus... more The banking sector in Nigeria have continuously struggled to make their shareholders happy by justifying the confidence reposed in them through better performance and high profit margins. But the low performance of the banking sector in Nigeria over the last decade has remained a big concern. This study explores the link between bank size, capital ratio, operating expenses, interest rate and the economic situation of the country on the banking sector profitability and performance in Nigeria. The ordinary least square regression model was employed on time-series data obtained from the Central Bank of Nigeria statistical bulletin (1981-2012). The results confirm that the bank size, capital ratio, operating expenses, interest rate and the economic situation of the country have statistically significant effects on banks’ profitability and performance in Nigeria. Thus, government policies in the banking sector must encourage banks to regularly raise their capital and provide the enabling environment that will accelerate overall development in the country. Bank management must efficiently manage their portfolios in order to protect the long run interest of profit-making.
This empirical study examined the factors affecting the contribution of financial institutions to... more This empirical study examined the factors affecting the contribution of financial institutions to national output in Nigeria between 1988 and 2007. The central focus is that a high level of financial variables is a necessary condition for accelerating growth in an economy. This is because of the central role of the financial institutions in mobilizing savings and allocating same for the development process. The study made use of secondary data, sourced for a period of 20 years. I specified three explanatory variables for the study based on theoretical underpinnings. I sought to establish a relationship between these variables and growth index (Gross Domestic Product). The ordinary least least squares analytical framework and the Johansen co-integration test was used in the analysis. A descriptive analysis was also done in the study. At the end of the study, I found that the three explanatory variables, as a whole were useful and had a statistical relationship with output . The empirical test indicates that, these variables satisfied the apriori expectation and are statistically significant. Thus it was concluded and recommended that, the financial market remain one of the mainstream in every economy that has the power to influence economic growth, hence the organize private sector is encourage to invest in it. This will enable the markets improve its illiquidity status for economic growth and development. Therefore the government must contribute in order to achieve these objectives through investing government securities in productive sectors and relaxing laws that spell threat to the financial institutions.
The banking sector in Nigeria have continuously struggled to make their shareholders happy by jus... more The banking sector in Nigeria have continuously struggled to make their shareholders happy by justifying the confidence reposed in them through better performance and high profit margins. But the low performance of the banking sector in Nigeria over the last decade has remained a big concern. This study explores the link between bank size, capital ratio, operating expenses, interest rate and the economic situation of the country on the banking sector profitability and performance in Nigeria. The ordinary least square regression model was employed on time-series data obtained from the Central Bank of Nigeria statistical bulletin (1981-2012). The results confirm that the bank size, capital ratio, operating expenses, interest rate and the economic situation of the country have statistically significant effects on banks’ profitability and performance in Nigeria. Thus, government policies in the banking sector must encourage banks to regularly raise their capital and provide the enabling environment that will accelerate overall development in the country. Bank management must efficiently manage their portfolios in order to protect the long run interest of profit-making.
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