Michael Ngei Mpia., & Samuel Dibiah.
Department of Banking and Finance
Captain Elechi Amadi Polytechnic
Port Harcourt, Nigeria.
Abstract.
The motivation behind this study is to experimentally look at the connection between private sector funding and economic growth in Nigeria. The paper looked at data from the Central Bank of Nigeria quarterly information from 1981Q1 to 2017Q4 with the E-views programming bundle (variant 9.0). The Vector Auto Regression (VAR) procedure was utilized to investigate the information, while hypothesis testing depended on the Block Erogeneity Wald test. The predetermined models included stationarity tests, diminished structure VAR gauge and primary examination. The Augmented Dickey Fuller Test demonstrates that the examination factors are fixed at first contrast or I(1). The VAR establishes plot corresponding to unit circle demonstrates that our predetermined diminished structure VAR models are steady. The Lagrange Multiplier (LM) symptomatic tests demonstrate that our predetermined VAR
models are effectively indicated. The p-esteem shows that private sector funding proportion is critical in clarifying varieties in economic growth (p = 0.0205). It is suggested that the Central Bank of Nigeria should persuade deposit money banks to reduce the current interest rate margin by reducing the lending rate and increasing the deposit rates. This would significantly reduce the current high financial exclusion rate as cost of borrowing would decrease while the level of domestic savings would increase.
Keywords: Capital Market Development, Volume of Stock, Market Capitalization, Banking System Capitalization and Economic Growth.
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