Educational Research

Educational Research (ISSN:2141-5161) Vol. 3(9), pp. 717-722, September, 2012         
Copyright © 2012 International Research Journals

 

Full Length Research Paper

The effect of trade components on financial development in Nigeria

Roseline Oluwatoyin Oluitan

Department of Accounting and Finance, Lagos State University

E- mail: roselinetoyin@yahoo.com

Received 12 August, 2012; Accepted 19 September, 2012

Abstract

This paper examines the importance of trade to impact the financial sector positively. The study uses ECM method and find that exports (which are a major economic activity with heavy reliance on oil-exports), are not very good in stimulating financial development. A further probe of decomposing exports to oil and non-oil reveals that non-oil exports is able to explain the relationship better while oil exports suggests an inverse relationship. Imports was also included and seems to support financial development more than oil exports that accounts for over 98% of total exports within the country. The result suggests a weak link between real economic activity and financial institutions and the need for better integration of proceeds into the financial system.

 

Keywords: Trade Components, Financial Development, Nigeria.

 

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