Financial Deepening, Foreign Direct Investment and Output Performance in Nigeria

Mumeen Olatunbosun Alabi, Sheriffdeen Adewale Tella, Ibrahim Abidemi Odusanya, Olumuyiwa Ganiyu Yinusa


This study examines the relationship between financial deepening, foreign direct investment and output performance in Nigeria from 1980-2015 using the Autoregressive Distributed Lag (ARDL) Bound Test approach. A long-run relationship was established between financial deepening indicators, foreign direct investment and output performance in Nigeria. Foreign direct investment and market capitalization as a percentage of the GDP exerted significantly on output performance both in the short-run and in the long-run periods. It is recommended that financial depth should be enhanced through improved and highly efficient provision of credit by banks to the real sector of the Nigerian economy.


financial sector; co-integration; output; Nigeria.

JEL Codes

C32; E44; E51; G20.

Full Text:



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