Authors :
Paul Terkula Zangu
Volume/Issue :
Volume 8 - 2023, Issue 5 - May
Google Scholar :
https://bit.ly/3TmGbDi
Scribd :
https://tinyurl.com/5n6tsxn3
DOI :
https://doi.org/10.5281/zenodo.8163832
Abstract :
The study examined the asymmetric
cointergrating relationship between financial
development and investment and the moderating role
of institution quality on investment.Time series
properties were examined using the Augumented Dickey
Fuller (ADF) and the Philip-perron (PP) unit root test.
It also used the Threshold AutoRegressive (TAR) and
momentum Threshold Autogressive (MTAR) for
cointergrating investigation, then the Vector Error
Correction Model (VECM). The core explanatory
variable used in the study was financial development,
proxy by the IMF financial development index. While
the explained variable is foreign direct investment and
domestic investment, then the moderating effect of
institutional quality was examined. The results show that
there was evidence of both symmetric and asymmetric
integration between these variables. A long cointegrating
relationship between institutional quality, financial
development and investment was found. The study found
evidence of asymmetric cointegrating relationship
between institutional quality, financial development and
investment. Furthermore, it was observed that
investment adjusted faster in the positive discrepancy
than the negative which suggested that an optimal level
of finance is crucial for economic growth. It is therefore,
expected that the Nigerian government through the
Central Bank put in place policies capable of improving
on financial development and further improve on the
fight against corruption so ride our investment
institutions of sharp practices.
Keywords :
Financial Development, Foreign Direct Investment, Domestic Investment, Institutional Quality and Nigeria.
The study examined the asymmetric
cointergrating relationship between financial
development and investment and the moderating role
of institution quality on investment.Time series
properties were examined using the Augumented Dickey
Fuller (ADF) and the Philip-perron (PP) unit root test.
It also used the Threshold AutoRegressive (TAR) and
momentum Threshold Autogressive (MTAR) for
cointergrating investigation, then the Vector Error
Correction Model (VECM). The core explanatory
variable used in the study was financial development,
proxy by the IMF financial development index. While
the explained variable is foreign direct investment and
domestic investment, then the moderating effect of
institutional quality was examined. The results show that
there was evidence of both symmetric and asymmetric
integration between these variables. A long cointegrating
relationship between institutional quality, financial
development and investment was found. The study found
evidence of asymmetric cointegrating relationship
between institutional quality, financial development and
investment. Furthermore, it was observed that
investment adjusted faster in the positive discrepancy
than the negative which suggested that an optimal level
of finance is crucial for economic growth. It is therefore,
expected that the Nigerian government through the
Central Bank put in place policies capable of improving
on financial development and further improve on the
fight against corruption so ride our investment
institutions of sharp practices.
Keywords :
Financial Development, Foreign Direct Investment, Domestic Investment, Institutional Quality and Nigeria.
