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Do Financial and Trade Openness Lead to Financial Sector Development in Nigeria?

Author

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  • Abayomi Toyin Onanuga Olaronke Toyin Onanuga

    (Olabisi Onabanjo University Ago-Iwoye, Ogun, Nigeria)

Abstract

With so many countries of the world now open to global capital and trade, this study identi?es whether ?nancial and trade openness contribute to the development of Nigeria’s ?nancial system by considering both ?nancial depth and access to ?nance indicators. To achieve this objective, we applied the Simultaneous Openness Hypothesis as our theoretical framework and the Generalized Method of Moments (GMM) as our estimation method. Our ?ndings reveal that opening trade while neglecting capital (vice versa) may be detrimental to the development of Nigeria ?nancial system. In view of this evidence, we recommend that the simultaneous opening of trade and ?nance is a more guaranteed way of ensuring improved ?nancial development in Nigeria. JEL Classification: F1; F3; G1; G2

Suggested Citation

  • Abayomi Toyin Onanuga Olaronke Toyin Onanuga, 2016. "Do Financial and Trade Openness Lead to Financial Sector Development in Nigeria?," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 19(2), pages 57-68, November.
    • Handle: RePEc:zag:zirebs:v:19:y:2016:i:2:p:57-68
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    References listed on IDEAS

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    Cited by:

    1. Simplice A. Asongu & Joseph Nnanna & Paul N. Acha-Anyi, 2020. "On the simultaneous openness hypothesis: FDI, trade and TFP dynamics in Sub-Saharan Africa," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-27, December.
    2. BAYAR Yilmaz & AKYUZ Fatma & EREM Isil, 2017. "Openness And Financial Development In Central And Eastern European Countries," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 12(3), pages 5-16, December.
    3. Onanuga, Olaronke & Onanuga, Abayomi, 2016. "The Response of Banking Sector Development to Financial and Trade Openness in the presence of Global Financial Crisis in Africa," MPRA Paper 83327, University Library of Munich, Germany, revised 30 Sep 2016.
    4. Simplice A. Asongu & Thales P. Yapatake Kossele & Joseph Nnanna, 2021. "Not all that glitters is gold: political stability and trade in Sub-Saharan Africa," Research Africa Network Working Papers 21/005, Research Africa Network (RAN).
    5. Zakaria Yakubu & Nanthakumar Loganathan & Tirta Nugraha Mursitama & Abbas Mardani & Syed Abdul Rehman Khan & Asan Ali Golam Hassan, 2020. "Financial Liberalisation, Political Stability, and Economic Determinants of Real Economic Growth in Kenya," Energies, MDPI, vol. 13(13), pages 1-16, July.
    6. Charles O. Manasseh & Godfrey I. Ihedimma & Felicia C. Abada & Ifeoma C. Nwakoby & Benson O. Njoku & Jude T. Kesuh & Chizoba G. Okeke & Felix C. Alio & J. U. J. Onwumere, 2020. "Did Global Financial Crisis Worsen Oil Price Volatility and Banking Sector Nexus in Selected ECOWAS and G-7 Member Countries?," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 390-395.

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    More about this item

    Keywords

    Financial Openness; Trade Openness; Financial Development; Financial Institutions; Financial Markets;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F3 - International Economics - - International Finance
    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services

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