Bank Credit and Private Sector Investment: Evidence from Nigeria
Journal Title: International Journal of Management Sciences - Year 2014, Vol 3, Issue 2
Abstract
There has been a shift by most developing countries away from public sector centrally planned economy to private sector driven economy. This move is as a result of the fact that the public sector driven economy resulted in resource inefficiency, poor service delivery and for the most part, steeped in corrupt practices. This move to private sector, through the encouragement of small and medium scale businesses (SME) is fraught with challenges due to paucity of needed credits from commercial banks and infrastructural facilities. This study seeks specifically to examine the impact of bank credit on private sector investment in Nigeria. The study was approached using Ordinary Least Square (OLS) tool to construct an econometric model. The key explanatory variables that impact on private sector investment used in this study are: Banks Loans and Advances (BLA), Real Gross Domestic Product (GDP), Interest Rate (INT) and Foreign Direct Investment (FDI). A stationarity test was carried out using the Augmented Dickey-Fuller (ADF) test and stationarity was found at first difference at 5% level of significance. The Johansen-Juselius co-integration technique was also employed in this study in assessing the co-integrating properties of the variables, especially in a multivariate context. The result of the test showed that for the period, 1980-2009, there was co-integrating relationships among variables suggesting long run relationship. The result of white hetroscedasticity test confirmed that the assumption of homoscedasticity was not violated. Informed by the findings, recommendation demands that credits to private investors in Nigeria should be encouraged and that interest rate management should be structured to enhance private investment.
Authors and Affiliations
Vincent A. Onodugo, Oluchukwu F. Anowor, Nnaemeka O. Ukweni, Francis O. Ibiam
Keywords
Related Articles
- EP ID EP26829
- DOI -
- Views 329
- Downloads 7
Exploring Mobile 4G adoption in Malaysia
The purpose of this paper is to determine the main factors affecting mobile 4 G service for adoption. The main reason to stimulate the present study was the significantly low rate of using 4G service among mobile users...
An Investigation to Compare the Effectiveness of Packet Loss Based on Proposed Methods in Literature
Optical flow routing is an optical networks that technique to ensure that the packet is always in the sequence order. This research is intended to ensure that the network traffic is enhanced of the Quality of Service (...
Management of Conflicts in Senior High Schools in Central Region, Ghana
Conflict management in the Senior High Schools has become a critical issue which needs to be looked at by propounding new models to complement or replace entirely the school disciplinary committee system that has becom...
Measuring Consumers Satisfaction towards the Services of Mobile Phone Operators in Bangladesh
The study is exploratory as well as descriptive in nature. The prime objective of the study is to know the customers’ satisfaction towards the various mobile phone operators' services in Bangladesh. The study is based...
What Factors Contribute to Entrepreneurs’ Decision Making Biases? A Comprehensive Study
Entrepreneurial decisions are of great value as well as importance in the field of entrepreneurship by playing an exceptional role in all major entrepreneurial activities. Given the unique characteristics of entrepreneu...