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Research Article | Open Access
Volume 8 | Issue 6 | Year 2021 | Article Id. IJEMS-V8I6P112 | DOI : https://doi.org/10.14445/23939125/IJEMS-V8I6P112

Globalization and Banking Sector Performance In Nigeria (1981-2019)

Abiodun Thomas Ogundele, Dr. Tonia Yetunde Akindutire, Dr. Segun Ilegbusi

Citation :

Abiodun Thomas Ogundele, Dr. Tonia Yetunde Akindutire, Dr. Segun Ilegbusi, "Globalization and Banking Sector Performance In Nigeria (1981-2019)," International Journal of Economics and Management Studies, vol. 8, no. 6, pp. 77-84, 2021. Crossref, https://doi.org/10.14445/23939125/IJEMS-V8I6P112

Abstract

Deposit money banks perform their intermediation functions in the face of globalization, which can have a positive or negative impact on their activities. This study looked at the impact of globalization on the banking sector performance in Nigeria, using secondary data from the Central Bank of Nigeria's Statistical Bulletin from 1981 to 2019. The Augmented Dickey-Fuller (ADF), Bound Test, and Autoregressive Distributed Lag models were used in the study to assess the impact of foreign direct investment, trade openness, and exchange rate on return on asset. The result revealed that trade openness, foreign direct investment, and exchange rate all have a positive relationship and effect on deposit money banks. The causality result revealed that trade openness and foreign portfolio investment did not granger cause return on asset, whereas exchange rate granger caused return on asset. As a result, the study concluded that globalization has had a significant impact on the Nigerian banking sector. The study recommended that the government create an enabling environment, such as tax breaks and social infrastructure, to encourage the inflow of foreign direct investment.

Keywords

Deposit money banks, economic growth financial sector, globalization, liberalization.

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