Finametric Analysis of Financial Innovation and Economic Growth in Nigeria

Abstract

The study empirically investigates the effect of financial innovation on economic growth in Nigeria using quarterly time series data spanning through the periods of 2010 to 2021 while historical data design was adopted for the study. The Gross Domestic Product was used as proxy for the dependent variable while Automated teller machine, Web banking, Mobile banking and Point of sale transactions were adopted as proxies for the independent variables. The Augmented Dickey Fuller (ADF), Phillips-Perron, Breusch-Pagan-Godfrey heteroskedasticity test, CUSUM test, Johansen cointegration test, Parsimonious Error Correction model and the fully modified Least Square were used for the data analysis. The outcome of the Johansen Cointegration and the fully modified least squares indicated evidence of long-run relationship between financial innovation and economic growth in Nigeria. From the foregoing, the study concludes that the adoption of financial innovation enhances economic growth in Nigeria. Based on the findings, the study suggests that appropriate policies should be formulated to build the confidence of customers regarding the reliability of financial innovation products.