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The Role of Banks in Capital Formation and Economic Growth: The Case of Nigeria

Omankhanlen, A. E (2012) The Role of Banks in Capital Formation and Economic Growth: The Case of Nigeria. Economy Transdisciplinarity Cognition, 15 (1). pp. 103-111.

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Abstract

This stud; investigate the role of banks in capital formation and economic growth." The case of Nigeria for tl1e period 1980-2009. The economies of all market-oriented nations 'denend o,; 1 the ,efficient operation, of complex and delicately balanced systems of. money~ an cred~ it. Banks are an indispensable element in these system. . This stud;{ employed tn1~ e Ordinaty Least square netwd in carrying m;t tl1e research. The expanatoty .variables employed include Commercial Banks Deposit Liability (BDL), Maximum Lending Rate (MLR), 1 Commercial Banks' Credit (CBC) and Investment by banks in Nigeria (BlV) . . The 'dependent variables are Gross Fixed Capital Formation (GFCF) and Gross Domestic Product (GDP), which is a measure of a nation's economic performance- economic growth {!l this instCfnce From the various test carried ; ut it was 'find out that Commercial Ba~.~ Deposit Liabilities, is fastic to Gross Fixed Capital Formation in Nigeria. This positivity of the coefficient .of Commercial Banks Deposit Liabilities "is 'in conformity to tfze economic"a prior/ expectation ·of a positive impact of Col}vnercial Banks Drmoit Liabilities on Gross Fixed,Capital Formation. Also, the regression result shows that 'Commercial Banks Credits (CBC) has a positive ; impitct of Gross Fixed Capital Formation (GFCF). '!t is therefore ._econmendea that efforts should be made by the monetary authorities to effectively manage the banks' maximum /ending. This policy, thrust will most likely' result into increased investment activities which will enhance capital formation in •Nigeria needed for its reflector investments and industrial growth. • r

Item Type: Article
Uncontrolled Keywords: deposit,liability; credit; capital formation
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: Mrs Patricia Nwokealisi
Date Deposited: 07 Nov 2014 12:06
Last Modified: 07 Nov 2014 12:06
URI: http://eprints.covenantuniversity.edu.ng/id/eprint/2929

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