Financial Inclusion Implications on the Liquidity of the Nigerian Capital Market

• Autorzy: Gbenga Festus Babarinde , Bashir Ahmad Daneji , Mamoud Abdul Jalloh , Tajudeen Idera Abdulmajeed
• Języki publikacji: EN

Abstrakty

EN

The objective of this study was to examine the implications of financial inclusion on capital market liquidity in Nigeria. Therefore, we applied Vector Autoregression (VAR) technique to the analysis of the quarterly time series data obtained from Central Bank of Nigeria's statistical bulletin and World Development Indicators for the period, 2008Q1 to 2018Q4. Findings of this study reveal that deposit penetration, bank penetration and credit penetration have positive but non-significant impact on stock market turnover ratio in Nigeria. Furthermore, unlike deposit penetration which exerts negative and non-significant influence on the value of shares traded ratio; bank penetration and credit penetration have positive but non-significant impact on the value of shares traded ratio in Nigeria. The study posits that financial inclusion exerts no significant influence/implications on stock market liquidity in Nigeria with a very negligible variation in the latter (stock market liquidity) explained by the former (financial inclusion). It is therefore recommended that accounts and bank penetrations should be re-engineered towards their translations to high volume and value of capital market transactions rather than mere financial penetration without any capital market implications in Nigeria. (original abstract)

Słowa kluczowe

EN

Stock exchange; Capital market; Financial liquidity; Vector Autoregression Model (VAR); Literature review

PL

Giełda; Rynek kapitałowy; Płynność finansowa; Model wektorowej autoregresji; Przegląd literatury

• Czasopismo: Copernican Journal of Finance & Accounting
• Rocznik: 2022
• Tom: 11
• Numer: nr 4
• Strony: 9--26

Twórcy

autor

Gbenga Festus Babarinde

• Modibbo Adama University of Technology, Yola, Nigeria

autor

Bashir Ahmad Daneji

• Modibbo Adama University of Technology, Yola, Nigeria

autor

Mamoud Abdul Jalloh

• Camusat SL Ltd., Freetown, Sierra Leone

autor

Tajudeen Idera Abdulmajeed

• Nasarawa State University, Keffi, Nigeria

Bibliografia

• Akakpo, A.A. (2020). Financial literacy, financial inclusion and stock market participation in Ghana (M.Sc. thesis). University of Ghana. http://ugspace.ug.edu.gh.
• Alade, M.E., Adeusi, S.A., Alade, F.O. (2020). Covid-19 pandemic and Nigerian stock market capitalisation. Ilorin Journal of Economic Policy, 7(3), 12-23.
• Ashraf, M.A. (2021). The impact of mobile financial services on the usage dimension of financial inclusion: An empirical study from Bangladesh. Copernican Journal of Finance and Accounting, 10(4), 9-25. http://dx.doi.org/10.12775/CJFA.2021.012.
• Babarinde, G.F. (2021). Financial inclusion and investment in Nigeria: Impact and causality analysis. Paper presented at the Colmans International Conference held at Bells University of Technology, Ota Nigeria.
• Babarinde, G.F., Ndaghu, J.T., Abdulmajeed, T.I., Enoruwa, K.O. (2021). Capital market performance: Its implications on external trade in Nigeria. Paper presented at the 2nd international banking and finance conference held at the University of Nigeria, Enugu Campus, Nigeria.
• Blake, M., Propson, D., Monteverde, C., Chidambaram, M. (2018). Advancing financial inclusion metrics: Shifting from access to economic empowerment (White paper). Switzerland: World economic forum and Tata consultancy services.
• Garcıa-Ascanio, C., Mate, C. (2010). Electric power demand forecasting using interval time series: A comparison between VAR and Imlp. Energy Policy, 38, 715-725. http://dx.doi.org/10.1016/j.enpol.2009.10.007.
• Gujarati, D.N., Porter, D.C. (2018). Basic econometrics (5th ed.). McGraw-Hill Companies: New York.
• Islam, M. (2018). Implications of financial inclusion in a country's economic development: A study on South Asia (Bangladesh). European Journal of Business and Management, 10(5), 46-54.
• Johansen, S. (1991). Estimation and hypothesis testing of cointegration vectors in Gaussian vector autoregressive models. Econometrica, 59, 1551-1580.
• Lakshmanasamy, T. (2020). Financial inclusion in the states of India: A panel data analysis of accounts penetration. Journal of Development Economics and Finance, 1(2), 209-225.
• Lesotho, O.K., Motlaleng, G.R., Ntsosa, M.M. (2016). Stock market returns and exchange rates in Botswana. African Journal of Economic Review, 4(2), 16-42.
• Migap, J.P., Ngutsav, A., Andohol, J. (2020). A causal analysis of financial inclusion, capital market and economic growth in Nigeria. Confluence Journal of Economics and Allied Sciences, 3(3), 1-14.
• Morgan, P., Pontines, V. (2014). Financial stability and financial inclusion. ADBI Working Paper, 488. http://www.adbi.org/working-paper/2014/07/07/6353.financial.stability.inclusion.
• Nwude, E.C. (2018). Investment analysis and portfolio management. Enugu: El-'Demak.
• Ofori-Abebrese, G., Baidoo, S.T., Essiam, E. (2020). Estimating the effects of financial inclusion on welfare in sub-Saharan Africa. Cogent Business and Management, 7, 1839164. http://dx.doi.org/10.1080/23311975.2020.1839164.
• Ogbeide, S.O., Igbinigie, O.O. (2019). Financial inclusion and poverty alleviation in Nigeria. Accounting and Taxation Review, 3(1), 42-54.
• Okoye, L.U., Adetiloye, K.A., Erin, O., Modebe, N.J. (2016). Financial inclusion: A panacea for balanced economic development. IBIMA conference, 28, 4384-4394.
• Omar, M.A., Inaba, K. (2020). Does financial inclusion reduce poverty and income inequality in developing countries? A panel data analysis. Economic Structures, 9(37), 1-25. http://dx.doi.org/10.1186/s40008-020-00214-4.
• Ozili, P.K. (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review, 18(4), 329-340.
• Ozili, P.K. (2020a). Financial inclusion in Nigeria: Determinants, challenges and achievements. MPRA Paper Working, 99173. https://mpra.ub.uni-muenchen.de/99173.
• Ozili, P.K. (2020b). Theories of financial inclusion. Working Paper SSRN, 3526548. http://dx.doi.org/10.2139/ssrn.3526548.
• Ratnawati, K. (2020). The impact of financial inclusion on economic growth, poverty, income inequality and financial stability in Asia. Journal of Asian Finance, Economics and Business, 7(10), 73-85. http://dx.doi.org/10.13106/jafeb.2020.vol7.no10.073.
• Rummel, O. (2015). Economic modelling and forecasting: VAR, SVAR and VECM modelling. England: Bank of England Centre for Central Banking Studies.
• Sims, C.A. (1980). Macroeconomics and reality. Econometrica, 48(1), 1-48. http://dx.doi.org/10.2307/1912017.
• Suharsono, A., Aziza, A., Pramesti, W. (2017). Comparison of vector autoregressive (VAR) and vector error correction models (VECM) for index of ASEAN stock price. AIP Conference Proceedings, 1913. http://dx.doi.org/10.1063/1.5016666.

Identyfikatory

DOI

10.12775/CJFA.2022.016