Tansian University Journal of Arts, Management & Social Sciences

Financial integration is the integration of a country’s local financial system with international financial markets. It usually requires liberalization of domestic financial sector and the capital account. The main objective of the study is to examine the effect of financial integration on economic development in Nigeria. Specifically, the study determines the effect of money supply on economic development in Nigeria. Analyzed the effect of private sector credit economic development in Nigeria. Investigate the effect of foreign direct investment on economic development in Nigeria. Examined the effect of gross fixed capital formation on economic development in Nigeria. Determine the effect of trade openness on economic development in Nigeria and market capitalization on economic development in Nigeria. Augmented Dickey Fuller Tests for Unit Roots and The Autoregressive Distributive Lag (ARDL) Approach which is capable of handling both stationary at level I(0) and first difference I(1) were used for the data analysis. The results of the study revealed that financial integration have significant short and long run policy effect on economic development in Nigeria. This connotes that financial integration is the driver of economic development in Nigeria. An active and efficient financial integration enhances growth and development of the economy. The study recommends that the Central Bank of Nigeria should employ an expansionary monetary policy that can increase the money supply to the real sectors and boost economic development in Nigerian. This connotes that financial integration is the driver of economic development in Nigeria. An active and efficient financial integration enhances growth and development of the economy. Amongst the recommendations is that there should be adoption of direct channels which include augmentation of domestic savings through diversification of production base to enhance export sector, reduction in the cost of capital through better global allocation of risk, development of financial sector and enhance technical know-how in Nigeria.

Open Full Text (PDF)