Published by: Admin
Published:6 months ago
This study examines the mediating role of institutional quality in the relationship between financial development and manufacturing output in Nigeria during the period from 1984 to 2016.
To achieve this objective, autoregressive distributed lag method (ARDL) is used to determine the short-run and long-run effects of financial development and that of its interaction with institutional quality indicators (democratic accountability, bureaucratic quality and control of corruption) on manufacturing output.
The findings show that financial development contributes positively to manufacturing output in the long-run. However, this contribution is moderated downwards by institutional quality indicators.
Against the background of the findings, it is recommended that government should develop a policy framework that will allow for a proper integration of financial sector with what goes on in the manufacturing sector and that government should also encourage some sort of harmonious working relationship among relevant institutions in both sectors for the development of manufacturing sector.