An Empirical Analysis of the Impact of Bank Credit on the Manufacturing Sector Output in Nigeria (1986 - 2016)
PDF

Keywords

Bank credit
Manufacturing sector
Autoregressive distributed lag model
Bound test
Lending rate.

How to Cite

ELIJAH, S. (2019). An Empirical Analysis of the Impact of Bank Credit on the Manufacturing Sector Output in Nigeria (1986 - 2016). Journal of Economics Library, 5(4), 371–382. https://doi.org/10.1453/jel.v5i4.1771

Abstract

Abstract. This study examined the impact of bank credits on manufacturing sector outputs in the deregulated Nigerian economy for the sample period 1986-2016. The data collected were analysed using Autoregressive Distributed Lag (ARDL) models. It was found out that banks credits contributed positively to manufacturing sector output in both short-run and long-run. For causality relationship, EXR, SAV and LR granger cause MSO. Hence, the main determinants of MSO are EXR, SAV and LR. Therefore, it was recommended amongst other things, that the Central Bank and other monetary authorities alike should make policy that will lead to increase in bank credit to the manufacturing sector. As this will play a catalytic role for growth in the sector in particular and the economy in general.

Keywords. Bank credit, manufacturing sector, Autoregressive Distributed Lag Model, Bound Test, Lending rate.

JEL. E51, L16, F31.

https://doi.org/10.1453/jel.v5i4.1771
PDF

References

Adelegan, O.J. (2011). Infrastructure deficiencies and investment in manufacturing firms in Nigeria. Journal of Economics and International Finance, 3(9), 542-552.

Andabai, P.W. & Eze, G.P. (2018). Bank credit and manufacturing sector growth in Nigeria: A causality investigation. International Journal of Economics, Commerce and Management, 6(3), 326.

Bada, O.T. (2017). The effect of banks' credits on the development of manufacturing and agricultural sectors of Nigeria's economy. International Journal of Advanced Studies in Economics and Public Sector Management, 5(1), 114-130.

Kalu, E.U., Alice, C.O., Chioma, D.O., Augustina, O.N. & Chinwe O. (2017). The relative impact of bank credit on manufacturing sector in Nigeria. International Journal of Economics and Financial Issues, 7(2), 196-201.

Gujarati, D. (2007). Basic Econometrics; 3rd Edition, McGraw. Hill, New York.

Imoughele, L.E. & Ismaila, M. (2013). Commercial bank credit accessibility and sectoral output performance in a deregulated financial market economy: Empirical evidence from Nigeria, Journal of Financeand Bank Management, 1(2), 36-59.

Jhingan, M. L (2003). Macroeconomic Theory. Vrinda Publications Ltd.

Nnamocha, P.N. & Charles N.E. (2015). Bank credit and agricultural output in Nigeria. British Journal of Economics, Management & Trade, 10(2), 1-12.

Nwanyanwu, O.J. (2010). An analysis of bank credit on the Nigeria economic growth (1992-2008). Jos J. Econ., 4, 43-58.

Nwokoro, A.N. (2017). An analysis of banks’ credit and agricultural output in Nigeria. International Journal of Innovative Finance and Economics Research, 5(1), 54-66.

Ogar, A., Nkamare, S.E., & Effiong, C. (2014). Commercial bank credit and its contributions on manufacturing sector In Nigeria. Research Journal of Finance and Accounting, 5(22), 188-196.

Oluwafemi, O., Enisan, A.A. & Elumilade, D.O. (2014). Impact of bank credit on the real sector: Evidence from Nigeria, Global Journal of Business Research, 8(3), 39-47.

Spencer, H.M. (1977). Contemporary Macroeconomics. 3rd Eds., Worth Publishers, New York.

Tomola, M.O., Adebisi, T.E., & Olawale, F.K. (2011). Bank lending, economic growth and the performance of the manufacturing sector in Nigeria. European Scientific Journal, 8(3), 19-36.

Udoka, C., Anyingang, R.A., & Tapang, A.T. (2012). An empirical analysis of the effect of interest rate management policies in Nigeria 1970-2010. Journal of Business and Management, 4(6), 5-10. doi. 10.9790/487X-0460510

Onyeiwu, C. (2012). Monetary policy and economic growth of Nigeria. Journal of Economics and Sustainable Development, 3(7), 62-71.

Pandey, L. (1999). Financial Management. 3rd Ed. London: McGrraw-Hill Inc.

Creative Commons License
This article licensed under Creative Commons Attribution-NonCommercial license (4.0)

Downloads

Download data is not yet available.