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Agro-industrialisation and financial intermediation in Nigeria

Adeleye, Bosede Ngozi and Osabuohien, E. S. C. and Asongu, Simplice (2020) Agro-industrialisation and financial intermediation in Nigeria. Emerald Insight.

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Purpose – The study aims to analyse the role of finance in the agro-industrialisation nexus in Nigeria using annual data on manufacturing value added, agricultural value added and volume of finance availed to the agricultural sector from 1981 to 2015. Design/methodology/approach – To establish the presence of a long-run relationship, the error correction model and bounds cointegration techniques are employed. Likewise, the model is augmented to test whether the associated relationship between industrial output and agricultural output depends on access to finance by farmers with the inclusion of an interaction term. Findings – Some salient contributions to the literature are as follows: agriculture and finance are strong and positive predictors of industrialisation in the long run; in the short run, past realisations of industrial output and finance have significant asymmetric effects on industrial output; the explanatory power of agriculture decreases with the growth of the financial system; and the long-run results validate the role of finance in the agro-industrialisation nexus. Originality/value – Given these findings, achieving growth in the agricultural sector that will induce desired industrialisation should be prioritised by the government through agencies such as the central bank, financial intermediaries and other stakeholders with a view to making agricultural financing a major concern for sustainable domestic consumption and industrial growth.

Item Type: Article
Uncontrolled Keywords: Agriculture, Industrialization, Financial intermediation, Cointegration, Causality Paper type Research paper
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: Mrs Hannah Akinwumi
Date Deposited: 25 May 2021 13:22
Last Modified: 25 May 2021 13:22

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