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DO BANKING SECTOR REFORMS CAUSE ECONOMIC GROWTH?: EMPIRICAL EVIDENCE FROM AFRICA’S LARGEST ECONOMY
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Andy Titus Okwu 
, Olusola Babatunde Falaiye, Rowland Tochukwu Obiakor, Ajibola Joseph Olusegun
Abstract
This paper employed time series data on relevant empirical diagnostics to examine banking sector growth-led nexus within the context of Africa’s largest economy, Nigeria. Diagnostics established stationarity of banking sector indicators and control variables at first difference. Findings showed no causal relationships between banking sector reforms and economic growth in the short-run and that, though liberalisation in particular did not Granger-cause growth of the economy during the study period, banking sector reforms caused growth of the real sector of the Nigerian economy. Hence, the caveat was that long-run growth effects of banking sector reforms on real sectors of economies are functions of policy targets of such banking or financial sectors reform strategies. Consequently, articulation of banking and financial sectors reforms within long-run rather than short-run perspectives and complementarity of liberalisation were recommended.
Keywords: Banking Sector Reforms, Economic Growth, Diagnostics, Dynamic Stochastic Model, Empirical Evidence
How to cite this paper: Okwu, A.T., Falaiye, O.B., Obiakor, R.T., Olusegun, A.J. (2015). Do banking sector reforms cause economic growth?: Empirical evidence from Africa’s largest economy. Corporate Ownership & Control, 13(1-5), 553-564. https://doi.org/10.22495/cocv13i1c5p3
