THE EFFECTS OF FOREIGN PRIVATE CAPITAL ON FINANCIAL
SYSTEM DEVELOPMENT IN NIGERIA
Akinwumi Festus Akinola, Obademi Olalekan
Volume - 2 Issue - 12, Pages - 5367-5390
This paper focuses on investigating the impact of foreign private capital on financial system
development in Nigeria with recourse to the two major sources of external private capital as
foreign direct investment (FDI) and foreign portfolio investment (FPI) between 1981 and 2014.
The main objective of this study is to ascertain the impact of foreign private capital on financial
system development in Nigeria, while the specific objectives are to determine the effects of FDI
and FPI on stock market development and banking sector development in Nigeria. Towards
achieving both the main and specific objectives of this study, econometric procedures of
regression analysis and descriptive statistics, unit root test, co-integration test and OLS were
used to determine the relationship between the regressors and the regressand. The data used
were mainly secondary data collected from sources such as the Central Bank of Nigeria (CBN),
the World Bank and the Nigerian Bureau of Statistics Bulletins. Findings from this study
revealed that FDI and FPI inflow has not had any significant impact on financial system
development, and stock market development. However, the impact on banking sector
development has been significant. the Federal Government (FG) should embark on better and
more stringent consolidating reforms of the country's financial system to serve as the veritable
impetus for businesses to thrive very well in the Nigerian economy.
Cite this Article:
[Akinola, Akinwumi Festus. "THE EFFECTS OF FOREIGN PRIVATE CAPITAL ON FINANCIAL SYSTEM DEVELOPMENT IN NIGERIA." International Journal of Social Science and Economic Research, vol. 2, no. 12, 2017, pp. 5367-5390. December.
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