Original scientific paper

https://doi.org/10.1515/zireb-2016-0008

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

Abayomi Toyin Onanuga ; Olabisi Onabanjo University Ago-Iwoye, Ogun, Nigeria
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 identifies whether financial and trade openness contribute to the development of Nigeria’s financial system by considering both financial depth and access to finance 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 findings reveal that opening trade while neglecting capital (vice versa) may be detrimental to the development of Nigeria financial system. In view of this evidence, we recommend that the simultaneous opening of trade and finance is a more guaranteed way of ensuring improved financial development in Nigeria.

Keywords

Financial Openness; Trade Openness; Financial Development; Financial Institutions; Financial Markets

Hrčak ID:

168639

URI

https://hrcak.srce.hr/168639

Publication date:

15.11.2016.

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