Financial Globalisation and Economic Transformation in Africa: Evidence from Nigeria

Open access

Abstract

This study examines the effects of financial globalisation on the Nigerian economy using data from the Central Bank of Nigeria statistical bulletin and the Nigeria Bureau of Statistics reports from 1992 to 2017. Using both descriptive and inferential statistical analyses, the study reveals that financial globalisation has helped to mobilise foreign direct investment into the economy and the significant positive effect of personal remittances on per capita income of Nigerians. Therefore it recommends that favourable policies to attract and retain FDI and personal remittances from developed nations should be encouraged and African governments and economic actors should consider all stakeholders’ interests, and ensure that an international financial and trade system is “fair and reciprocal” to eliminate the persisting trends in abject poverty, predatory trade policies and the escalation of economic inequalities in Africa.

Adaoglu C., 2000, Instability in the dividend policy of the Istanbul Stock Exchange (ISE) corporations: Evidence from an emerging market, Emerging Markets Review, 1(3), pp. 252-270.

Antwi S., Koranteng E.O., 2017, International remittances and economic growth in Ghana: Does the measure of financial development matter?, International Journal of Technology and Management Research, 2(1), pp. 46-59.

Asongu S., 2014, Financial development dynamic thresholds of financial globalization: evidence from Africa, Journal of Economic Studies, 41(2), pp. 166-195.

Asongu S.A., De Moor L., 2017, Financial globalisation dynamic thresholds for financial development: Evidence from Africa, The European Journal of Development Research, 29(1), pp. 192-212.

Baltagi B.H., Demetriades P.O., Law S.H., 2009, Financial development and openness: Evidence from panel data, Journal of Development Economics, 89(2), pp. 285-296.

Bekaert G., Ehrmann M., Fratzscher M., Mehl A., 2014, The global crisis and equity market contagion, The Journal of Finance, 69(6), pp. 2597-2649.

Bekaert G., Harvey C.R., Lundblad C., 2011, Financial openness and productivity, World Development, 39(1), pp. 1-19.

Bekaert G., Harvey C.R., Lundblad C.T., 2003, Equity market liberalization in emerging markets, Journal of Financial Research, 26(3), pp. 275-299.

Bianchi F., Civelli A., 2015, Globalization and inflation: Evidence from a time-varying VAR, Review of Economic Dynamics, 18(2), pp. 406-433.

Broner F.A., Ventura J., 2010, Rethinking the effects of financial liberalization, no. w16640. National Bureau of Economic Research.

Buckley P.J., Clegg J., Wang C., 2010, Is the Relationship between Inward FDI and Spillover Effects Linear? An Empirical Examination of the Case of China, [in:] Foreign Direct Investment, China and the World Economy, Palgrave Macmillan, London.

Burgess M.R., Haksar M.V., 2005, Migration and foreign remittances in the Philippines, no. 5-111, International Monetary Fund.

Cherodian R., Thirlwall A.P., 2015, Regional disparities in per capita income in India: Convergence or divergence?, Journal of Post Keynesian Economics, 37(3), pp. 384-407.

Du W., Tepper A., Verdelhan A., 2018, Deviations from covered interest rate parity, The Journal of Finance, 73(3), pp. 915-957.

Egbetunde T., Akinlo A.E., 2015, Financial globalization and economic growth in Sub-Saharan Africa: Evidence from panel cointegration tests, African Development Review, 27(3), pp. 187-198.

Felbermayr G.J., Hiller S., Sala D., 2010, Does immigration boost per capita income?, Economics Letters, 107(2), pp. 177-179.

Fernández A., Klein M.W., Rebucci A., Schindler M., Uribe M., 2015, Capital control measures: A new dataset, no. w20970, National Bureau of Economic Research.

Giuliano P., Ruiz-Arranz M., 2009, Remittances, financial development, and growth, Journal of Development Economics, 90(1), pp. 144-152.

Imoudu E.C., 2012, The impact of foreign direct investment on Nigeria’s economic growth; 1980-2009: Evidence from the Johansen’s cointegration approach, International Journal of Business and Social Science, 3(6).

Jalil A., Feridun M., 2011, The impact of growth, energy and financial development on the environment in China: A cointegration analysis, Energy Economics, 33(2), pp. 284-291.

Keynes J.M., 2016, General Theory of Employment, Interest and Money, Atlantic Publishers & Dist.

King M., Low D., 2014, Measuring the ‟world” real interest rate, no. w19887, National Bureau of Economic Research.

Kiviaho J., Nikkinen J., Piljak V., Rothovius T., 2014, The co-movement dynamics of European frontier stock markets, European Financial Management, 20(3), pp. 574-595.

Noakes M.A., Rajaratnam K., 2016, Testing market efficiency on the Johannesburg Stock Exchange using the overlapping serial test, Annals of Operations Research, 243(1-2), pp. 273-300.

Nurudeen A., 2009, Does stock market development raise economic growth? Evidence from Nigeria, The Review of Finance and Banking, 1(1).

Nyawata O., Bird G., 2004, Financial liberalisation in Southern Africa: An assessment, Development Policy Review, 22(3), pp. 287-307.

Nzotta S.M., Okereke E.J., 2009, Financial deepening and economic development of Nigeria: An Empirical Investigation.

Okodua H., 2009, Foreign direct investment and economic growth: Co-integration and causality analysis of Nigeria, African Finance Journal, 11(1), pp. 54-73.

Prasad, E., Rogoff, K., Wei, S.J., Kose, M.A., 2005, Effects of financial globalization on developing countries: some empirical evidence, [in:] India’s and China’s recent experience with reform and growth, pp. 201-228, Palgrave Macmillan, London.

Rey H., 2015, Dilemma not trilemma: The global financial cycle and monetary policy independence, no. w21162, National Bureau of Economic Research.

Solt F., 2016, The standardized world income inequality database, Social Science Quarterly, 97(5), pp. 1267-1281.

Stern R., 2017, Balance of Payments: Theory and Economic Policy, Routledge.

Ugur M., 2014, Corruption’s direct effects on per-capita income growth: A meta-analysis, Journal of Economic Surveys, 28(3), pp. 472-490.

Wang C., Hong J., Kafouros M., Wright M., 2012, Exploring the role of government involvement in outward FDI from emerging economies, Journal of International Business Studies, 43(7), pp. 655-676.