Bank Credit and Economic Growth： Evidence from Nigeria.docVIP

Bank Credit and Economic Growth： Evidence from Nigeria 　　[a] Department of Accounting Finance， Lagos State University， Nigeria. 　　*Corresponding Author. 　　Received 2 October 2012； accepted 22 November 2012 　　Abstract 　　This paper assesses the significance of real bank credit in stimulating real output growth in the case of Nigeria. The study observes that credit Granger causes output. In testing the factors that mobilise credit， it finds that exports in general are negatively related to credit. However， while oil exports are negatively related to credit， non-oil export has positive relationship with credit. Credit is also positively linked to capital inflows and imports. These findings suggest that bank credit is inextricably linked to the opening of the economy to international trade and capital flows in non-oil. 　　Key words： Bank credit； Economic growth； Nigeria 　　Roseline Oluwatoyin Oluitan （2012）. Bank Credit and Economic Growth： Evidence from Nigeria. International Business and Management， 5（2）， -0. Available from： http：///index.php/ibm/article/view/j.ibm.1923842820120502.1040 　　DOI： http：///10.3968/j.ibm.1923842820120502.1040 　　INTRODUCTION 　　The importance of financial institutions in generating growth within the economy has been widely discussed in the literature. Early economists such as Schumpeter in 1911 identified banks’ role in facilitating technological innovation through their intermediary role. He believed that efficient allocation of savings through identification and funding of entrepreneurs with the best chances of successfully implementing innovative products and production processes are tools to achieve this objective. Several scholars thereafter （McKinnon， 1973； Shaw， 1973； Fry， 1988； King Levine， 1993） have supported the above postulation about the significance of banks to the growth of the economy. In assessing the relationship， a large number of recent empirical studies （De Serres et al.， 2006； Levine， 2005； etc） have relied