Financial sector development, economic growth and poverty reduction: New Evidence from Nigeria financial sector development, economic growth and poverty reduction: New Evidence from Nigeria

Finansal sektörde gelişim, ekonomik büyüme, yoksulluk oranın düşürülmesi: Nijerya örneği

Özet

Büyüyen finansal sistem ve yoksulluğun azaltılması gelişmiş ekonomilerin en önemli özellikleriolarak karşımıza çıkmaktadır. Son yıllarda fakir ülkelerde, bu iki dinamik arasındaki ilişki tartışmakonusu olmaya başlamıştır. Bu çalışma Nijeryada finansal büyüme ve yoksulluk oranınındüşürülmesi arasındaki ilişkiyi ARDL ve Toda, Yamamoto Modellerini kullanarak ortayakoymayı amaçlamaktadır. 1970-2011 yılları arasındaki sürece ilişkin neden-sonuç ilişkisini ortayakoyacak datalar mevcut değildir. Aynı zamanda çalışmada Nijerya toplumunun fakir kesiminin definansal kaynaklara ulaşabildiği ve ülkenin ekonomik büyüme sürecine tamamıyla dahil olduğuanaliz edilmektedir. Çalışmanın ampirik sonuçlarına göre finansal sektörün gelişmesi yoksullukseviyesini düşürmemektedir. Finansal sektörün gelişimi yoksulluk seviyesinin düşürülmesineyönelik krediler alımını arttırmaktadır. Öte yandan, ekonomik büyüme beraberinde finansalbüyümeyi de getirmektedir. Sonuç olarak, tek başına yoksulluk oranını azaltamasa da finansals ektörün gelişimi için ekonomik büyüme şarttır.

Abstract

There is a common view that a well developed financial system will usher economic growth andfurther reduce the level of poverty. In late years the automaticity of this relationship in poor statessuch as Nigeria has been an area of considerable argument. This study attempts to examine thispresuppose causal relationship between financial sector development, economic growth andpoverty reduction in Nigeria. The study uses Autoregressive Distributed Lag model (ARDL) andToda and Yamamoto No causality test, using a time series data covering the period of 1970-2011.The study includes poverty into the ongoing competing finance growth nexus hypothesis, in orderto ascertain whether the poor segment of the Nigerian society have access to financial resourcesand also fully participate in the economic growth process in the country. Empirical results of thestudy reveal that financial sector development does not cause poverty reduction. This implies,increased in the supply of loan able funds due to financial sector development is not enough toensure poverty reduction. Certain measures are important. Therefore, the results reveal, thateconomic growth causes financial sector growth. Implies that economic growth lead and financialsector follow. This implies that for financial sector development, economic growth is necessary,even though not sufficient for poverty reduction.There is a common view that a well developed financial system will usher economic growth andfurther reduce the level of poverty. In late years the automaticity of this relationship in poor statessuch as Nigeria has been an area of considerable argument. This study attempts to examine thispresuppose causal relationship between financial sector development, economic growth andpoverty reduction in Nigeria. The study uses Autoregressive Distributed Lag model (ARDL) andToda and Yamamoto No causality test, using a time series data covering the period of 1970-2011.The study includes poverty into the ongoing competing finance growth nexus hypothesis, in orderto ascertain whether the poor segment of the Nigerian society have access to financial resourcesand also fully participate in the economic growth process in the country. Empirical results of thestudy reveal that financial sector development does not cause poverty reduction. This implies,increased in the supply of loan able funds due to financial sector development is not enough toensure poverty reduction. Certain measures are important. Therefore, the results reveal, thateconomic growth causes financial sector growth. Implies that economic growth lead and financialsector follow. This implies that for financial sector development, economic growth is necessary,even though not sufficient for poverty reduction.