Relevance of Financial Sector Development on Real Sector Productivity: 21st Century Evidence from Nigerian Industrial Sector

Abstract

This study focuses on the Nigerian industrial sector to examine the relevance of financial sector development on real sector productivity in the 21 st century. The model adapts the financial sector development measures used in King and Levine (1993) as predictors of industrial sector production output. Estimating the model with Ordinary Least Square (OLS) method, the study reveals that there is a strong linear relationship between the financial sector and real sector because the coefficient of multiple determinations is relatively high; thus suggesting that financial sector development is crucial for real sector productivity.