Impact of Foreign Inflows on Financial Institution Development in Nigeria: Evidence from ARDL Approach

Authors

  • Irom Ishaku Agabi Federal University Wukari, Nigeria
  • Hyeladi Stanley Dibal Federal University Wukari, Taraba State, Nigeria

Keywords:

Diaspora remittances, financial institutions development, foreign direct investments, foreign inflows, official development aids

Abstract

This study investigated the impact of foreign inflows on financial institutions development in Nigeria spanning 1981 to 2021. Employing the autoregressive distributed lag model, the findings of the study revealed that diaspora remittances have a positive and significant impact on financial institutions development in Nigeria in the long-run and short-run, while foreign direct investment and official development aids both presented negative and significant impact on financial institutions development in Nigeria in the short run. Inflation as a control variable presented both positive and significant impact on financial institutions development in Nigeria in the short-run and long-run. The study, therefore concludes that foreign inflows impact the development of financial institutions in Nigeria and the direction of the impact is dependent on the nature and type of foreign inflows into the country. It therefore, recommends that policymakers should initiate the monetary authority policies that could display economic stability. This can be achieved when the Nigeria government improve on securities, give tax breaks and preferential exchange rates for foreign remittances to encourage home country investment through financial institutions.

Author Biographies

Irom Ishaku Agabi , Federal University Wukari, Nigeria

Department of Banking and Finance
Federal University Wukari, Nigeria

Hyeladi Stanley Dibal, Federal University Wukari, Taraba State, Nigeria

Department of Banking and Finance
Federal University Wukari, Nigeria

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Published

2024-03-18

How to Cite

Agabi, I. I., & Dibal, H. S. (2024). Impact of Foreign Inflows on Financial Institution Development in Nigeria: Evidence from ARDL Approach. FUW-International Journal of Management and Social Sciences, 9(1), 14–31. Retrieved from https://fuw-ijmss.com.ng/index.php/fijmss/article/view/61