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An Analysis of Financial System Development and Banking Sector Performance in Nigeria

Author

Listed:
  • ASEMOTA, Georgina Okpoa

    (Senior Lecturer, Benson Idahosa University Benin City Nigeria)

  • ASEMOTA, Osamede Imelda

    (Staff, Edo State Secondary Education Board, Benin City Nigeria)

  • OMOREGIE, Charity Lucky

    (Staff, Edo State Secondary Education Board, Benin City Nigeria)

Abstract

The study assessed the impact of financial system development on the banking sub-sector performance in Nigeria by using indices representing financial access, financial efficiency and financial depth as its explanatory variables. The proxy used for banking sector performance is the capital adequacy ratio. Due to the paucity of high-frequency data for the relevant variables, the study converted the sourced annual data spanning from 2004 to 2021 to monthly data. The preliminary data investigation indicated that the ARDL model is appropriate for the analysis. An ARDL-ECM model was then estimated using the Ordinary Least Square estimation technique. The results reveal that the financial market’s activities are significant determinants of banking performance in Nigeria. The paper recommends that making the capital market and other non-bank institutions more attractive to investors should be a priority policy.

Suggested Citation

  • ASEMOTA, Georgina Okpoa & ASEMOTA, Osamede Imelda & OMOREGIE, Charity Lucky, 2023. "An Analysis of Financial System Development and Banking Sector Performance in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(5), pages 1459-1472, May.
    • Handle: RePEc:bcp:journl:v:7:y:2023:i:5:p:1459-1472
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    References listed on IDEAS

    as
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    7. Richard Reid, 2010. "Financial Development : A Broader Perspective," Finance Working Papers 23127, East Asian Bureau of Economic Research.
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