Abstract
This study empirically examined the relationship between banks’ consolidation and performance of the Nigerian economy from 1970 – 2017 using the Ordinary Least Square (OLS) technique. The findings revealed that Banks’ consolidation in Nigeria had a significant impact on the performance of the economy. Banks’ consolidation significantly facilitates and promotes banks’ credit to the economy and economic growth in Nigeria. The economy had performed better in the post-consolidation era than the pre-consolidation era. It is recommended that consolidation policy should be carried out periodically. Keywords : Banks Consolidation, banks’ credit, Nigerian Economy DOI : 10.7176/JESD/10-10-03 Publication date :May 31 st 2019
Highlights
The prospect of reducing poverty is associated with every well-performing economy
The hypotheses that gross capital formation and liquidity ratio has no significant impact on economic growth after the consolidation policy is rejected while the hypotheses that monetary policy rate has no significant impact on economic growth after the consolidation is accepted. This finding is consistent with the findings of Nwankwo (2013) in Nigeria who analyzed the impact pre and post bank consolidation on the www.iiste.org growth of the Nigerian economy and found post bank consolidation to had a significant effect on the growth of the Nigerian economy; an insignificant effect was found for the period before the consolidation policy
The study examined the relationship between bank consolidation and performance of Nigeria's economy
Summary
The prospect of reducing poverty is associated with every well-performing economy. A performing economy has a higher production capacity for goods and services and creates jobs and income for the people (Ohale and Onyema, 2002). This, forms the basis for the study, focusing on the impact of bank consolidation on deposit money banks’ credit to the Nigerian economy as well as the impact of bank consolidation on economic growth in Nigeria. Empirical Literature The empirical stance includes the study by Okoye, Adetiloye, Erin and Evbuomwan (2017) They examined the pre- (9-year period preceding the 2005 banking consolidation exercise) and post- (9-year) consolidation performance of the banking sector of Nigeria. The results of the study revealed that consolidation induced changes in the banking structure in terms of size and capitalization positively influence bank lending performance in the Nigerian www.iiste.org banking industry. The dataset is an annual time series covering the 1970 – 2017
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