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Articles

CJBSS: Vol. 10 No.1, June 2019

Investigating Structural Breaks in Selected Finance-Growth Variables in Nigeria. A Saikkonen and Lutkepohl (2002) Approach

  • Adekunle Babatunde Sunday (Ph.D) & Oyelami Lukman Oyeyinka
DOI
https://doi.org/10.20370/cjbss.v10i1.1607
Submitted
August 26, 2019
Published
2019-06-29

Abstract

The need to identify point of break in economic variables cannot be over emphasized and thus, the need for this study to investigate the point of structural break in some selected financial sector variables in Nigeria using the Saikkonen-Lutkepohl (2002) method. The study identifies years 2008 as point of break for private sector credit ratio to GDP and Broad money supply ratio, 1986 for GDP per capita, 2007 for Market capitalization ratio, 2006 for Liquidity ratio, 2001 for investment ratio and 2005 for openness ratio. The study recommends that structural breaks should be considered in any finance-growth modeling to avoid spurious results which may ultimately lead to wrong or inappropriate policy formulation and may be counterproductive to the objective of economic growth and financial development.