IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v7y2023i5p1552-1575.html
   My bibliography  Save this article

Regulatory Institutions and National Economic Development in Nigeria

Author

Listed:
  • Abiloro, T. O

    (Lecturer, Rufus Giwa Polytechnic, Owo, Ondo state, Nigeria.)

  • Ilugbami, J. O.

    (Deputy Registrar, Rufus Giwa Polytechnic, Owo, Ondo state, Nigeria.)

Abstract

The financial sector is the epicenter of productive activity of an economy as it performs the vital role of financial intermediation, provider of payment services and the arbiter of monetary policy communication and implementation. Therefore, the objective of the study is to examine the effect of CBN as a regulatory institution on national economic development in Nigeria. The study used ex-post facto research design and the study covered a period of ten years (2011 – 2020). The study employed ordinary least square (OLS) method of estimation to establish the importance of the independent variables on the dependent’s variables. The findings revealed that Monetary policy Rate (MPR) has insignificant positive (202.2958/0.2296 ˃ 0.05) effect on the National Economic Development in Nigeria; Credit to Private Sector (CPS) has insignificant negative (-208.6998/0.1319 ˃ 0.05) effect on the National Economic Development in Nigeria; Liquidity Ratio (LQR) has significant negative (-57.09290/0.0503 = 0.05) effect liquidity ratio on the National Economic Development in Nigeria; and Interest rate (INT) has insignificant negative (-274.8069/0.1717 ˃ 0.05) effect liquidity ratio on the National Economic Development in Nigeria. The study concluded that the CBN current policies has been anti-people and over the years not having significant effect on economic development in Nigeria. The study recommended among other things that CBN should critically re-examines its regulatory policies to focus more on visionary policies that would cause the financial deepening indicators, monetary policy rate and exchange rate to positively and significantly engender development of the financial system. Central Bank of Nigeria should check mate their policy rates to ensure the prevention of inflation in the economy.

Suggested Citation

  • Abiloro, T. O & Ilugbami, J. O., 2023. "Regulatory Institutions and National Economic Development 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 1552-1575, May.
    • Handle: RePEc:bcp:journl:v:7:y:2023:i:5:p:1552-1575
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-7-issue-5/1552-1575.pdf
    Download Restriction: no
    File URL: https://www.rsisinternational.org/journals/ijriss/articles/regulatory-institutions-and-national-economic-development-in-nigeria/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paul L. Joskow & Roger G. Noll, 1981. "Regulation in Theory and Practice: An Overview," NBER Chapters, in: Studies in Public Regulation, pages 1-78, National Bureau of Economic Research, Inc.
    2. Calderon, Cesar & Liu, Lin, 2003. "The direction of causality between financial development and economic growth," Journal of Development Economics, Elsevier, vol. 72(1), pages 321-334, October.
    3. Carmen M. Reinhart & M. Belen Sbrancia1, 2015. "The liquidation of government debt," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 30(82), pages 291-333.
    4. Baldwin, Robert & Cave, Martin & Lodge, Martin, 2011. "Understanding Regulation: Theory, Strategy, and Practice," OUP Catalogue, Oxford University Press, edition 2, number 9780199576098.
    5. Mark A. Carlson & Burcu Duygan-Bump & William R. Nelson, 2015. "Why Do We Need Both Liquidity Regulations and a Lender of Last Resort? A Perspective from Federal Reserve Lending during the 2007-09 U.S. Financial Crisis," Finance and Economics Discussion Series 2015-11, Board of Governors of the Federal Reserve System (U.S.).
    6. Eric Monnet, 2018. "Controlling Credit. Central Banking and the Planned Economy in Postwar France, 1948–1973," Post-Print halshs-02921743, HAL.
    7. Shushu Li & Jinglan Zhang & Yong Ma, 2015. "Financial Development, Environmental Quality and Economic Growth," Sustainability, MDPI, vol. 7(7), pages 1-22, July.
    8. Huberto M. Ennis & Todd Keister, 2008. "Understanding monetary policy implementation," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 94(Sum), pages 235-263.
    9. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
    10. Svensson, Lars E.O., 2017. "Cost-benefit analysis of leaning against the wind," Journal of Monetary Economics, Elsevier, vol. 90(C), pages 193-213.
    11. King, M.L. & Harris, D.C., 1995. "The Applications of the Durbin-Watson Test to the Dynamic Regression Model Under Normal and Non-Normal Errors," Monash Econometrics and Business Statistics Working Papers 6/95, Monash University, Department of Econometrics and Business Statistics.
    12. Richard A. Posner, 1974. "Theories of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 5(2), pages 335-358, Autumn.
    13. Mark Carlson, 2015. "Lessons from the Historical Use of Reserve Requirements in the United States to Promote Bank Liquidity," International Journal of Central Banking, International Journal of Central Banking, vol. 11(1), pages 191-224, January.
    14. Daniel F. Spulber, 1989. "Regulation and Markets," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262192756, December.
    15. Abu Nurudeen, 2009. "Does Stock Market Development Raise Economic Growth? Evidence from Nigeria," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 1(1), pages 015-026, December.
    16. Martin Shubik, 1970. "On Different Methods For Allocating Resources," Kyklos, Wiley Blackwell, vol. 23(2), pages 332-337, May.
    17. Bech, Morten & Keister, Todd, 2017. "Liquidity regulation and the implementation of monetary policy," Journal of Monetary Economics, Elsevier, vol. 92(C), pages 64-77.
    18. Anil K. Kashyap & Jeremy C. Stein, 2012. "The Optimal Conduct of Monetary Policy with Interest on Reserves," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(1), pages 266-282, January.
    19. Igbinosa, S. & Sunday Ogbeide & Babatunde Akanji, 2017. "Empirical Assessment on Financial Regulations and Banking Sector Performance," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 6(3), pages 143-155.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eric Monnet & Miklos Vari, 2023. "A Dilemma between Liquidity Regulation and Monetary Policy: Some History and Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 55(4), pages 915-944, June.
    2. Eric Monnet & Miklos Vari, 2019. "Liquidity Ratios as Monetary Policy Tools: Some Historical Lessons for Macroprudential Policy," IMF Working Papers 2019/176, International Monetary Fund.
    3. J.A. den Hertog, 2010. "Review of economic theories of regulation," Working Papers 10-18, Utrecht School of Economics.
    4. Christopher J Curfman & John Kandrac, 2022. "The Costs and Benefits of Liquidity Regulations: Lessons from an Idle Monetary Policy Tool [Crisis resolution and bank liquidity]," Review of Finance, European Finance Association, vol. 26(2), pages 319-353.
    5. Agénor, Pierre-Richard & Flamini, Alessandro, 2022. "Institutional mandates for macroeconomic and financial stability," Journal of Financial Stability, Elsevier, vol. 62(C).
    6. Ghossoub, Edgar A., 2023. "Economic growth, inflation, and banking sector competition," Economic Modelling, Elsevier, vol. 129(C).
    7. Christopher Curfman & John Kandrac, 2019. "The costs and benefits of liquidity regulations: Lessons from an idle monetary policy tool," Finance and Economics Discussion Series 2019-041, Board of Governors of the Federal Reserve System (U.S.).
    8. Miklos Vari, 2020. "Monetary Policy Transmission with Interbank Market Fragmentation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 52(2-3), pages 409-440, March.
    9. Fei Guo & Shi He, 2020. "The finance-growth nexus in China: a meta-analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 27(13), pages 1071-1075, June.
    10. Nyasha Sheilla & Odhiambo Nicholas M., 2017. "Bank Versus Stock Market Development in Brazil: An ARDL Bounds Testing Approach," South East European Journal of Economics and Business, Sciendo, vol. 12(1), pages 7-21, April.
    11. Rothschild, Kurt W., 1990. "Deregulierung. Anatomie eines Schlagwortes," Walter Adolf Jöhr Lecture 1990, University of St. Gallen, School of Economics and Political Science, Institute of Economics (FGN-HSG).
    12. Veronika Kajurová & Petr Rozmahel, 2016. "Stock Market Development and Economic Growth: Evidence from the European Union," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 64(6), pages 1927-1936.
    13. Ouyang, Yaofu & Li, Peng, 2018. "On the nexus of financial development, economic growth, and energy consumption in China: New perspective from a GMM panel VAR approach," Energy Economics, Elsevier, vol. 71(C), pages 238-252.
    14. Hao Chen & Duncan O. Hongo & Max William Ssali & Maurice Simiyu Nyaranga & Consolata Wairimu Nderitu, 2020. "The Asymmetric Influence of Financial Development on Economic Growth in Kenya: Evidence From NARDL," SAGE Open, , vol. 10(1), pages 21582440198, February.
    15. Samargandi, Nahla & Fidrmuc, Jan & Ghosh, Sugata, 2015. "Is the Relationship Between Financial Development and Economic Growth Monotonic? Evidence from a Sample of Middle-Income Countries," World Development, Elsevier, vol. 68(C), pages 66-81.
    16. De Grauwe, Paul & Ji, Yuemei, 2024. "How to conduct monetary policies. The ECB in the past, present and future," Journal of International Money and Finance, Elsevier, vol. 143(C).
    17. Hahn, Robert & Evans, Lewis, 2010. "Regulating Dynamic Markets: Progress in Theory and Practice," Working Paper Series 4052, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    18. Mina Baliamoune-Lutz, 2007. "Entrepreneurship, Reforms, and Development: Empirical Evidence," ICER Working Papers 38-2007, ICER - International Centre for Economic Research.
    19. Mountain, Bruce R., 2019. "Ownership, regulation, and financial disparity: The case of electricity distribution in Australia," Utilities Policy, Elsevier, vol. 60(C), pages 1-1.
    20. Wahidin, Deni & Akimov, Alexandr & Roca, Eduardo, 2021. "The impact of bond market development on economic growth before and after the global financial crisis: Evidence from developed and developing countries," International Review of Financial Analysis, Elsevier, vol. 77(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:7:y:2023:i:5:p:1552-1575. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.