Investigating the Determinants of Private Savings in Nigeria: The Role of Financial Development
DOI:
https://doi.org/10.59890/ijacs.v2i1.1613Keywords:
Private Savings, Capital Formation, Financial Development, Bounds Test, NigeriaAbstract
This study examines the relationship between financial development, capital formation, and private savings in Nigeria. The research utilizes the ARDL approach to analyze annual time series data from 1981-2021. The results indicate a significant positive impact of financial development and capital formation on private savings, while gross domestic product per capita and real interest rates have a negative impact. The study also finds a unidirectional causality from financial development and capital formation to private savings. The study recommends that policymakers focus on further developing the financial sector to encourage higher private savings and capital formation. Further research is needed to explore the specific mechanisms through which financial development and capital formation influence private savings in Nigeria, as well as longitudinal and comparative studies to provide valuable insights into the factors that drive private savings and capital formation in developing economies
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