This document examines the macroeconomic determinants of bond market development in Nigeria. It finds that exchange rate, interest rate, inflation rate, and banking sector development have negative and significant influences on Nigerian bond market capitalization, demonstrating that they are robust macroeconomic determinants of bond market development in Nigeria. The study aims to address questions about what drives bond market development in Nigeria from a macroeconomic perspective, as the Nigerian bond market is characterized as shallow, inefficient, and bank-dominated compared to more developed market-based economies. Time series data from 32 years was analyzed using regression techniques to study the relationship between various macroeconomic factors and aggregate bond market capitalization in Nigeria.
Macroeconomic factors that affect the quality of lending in albania.Alexander Decker
This document analyzes the relationship between macroeconomic factors and credit quality in the Albanian banking system from 2005 to 2013. It finds that non-performing loan rates increased, influenced by the economic slowdown after 2008 and currency depreciation. Unemployment, lower GDP growth, reduced remittances, and inflation stability negatively impacted borrowers' ability to repay loans. A regression analysis showed credit risk significantly increased when GDP growth declined and interest rates rose. Macroeconomic changes, like deteriorating GDP growth, substantially affected the level of non-performing loans in Albanian banks.
How The Growth In Bond Market Affect The Performance Of Banks In Briics?inventionjournals
When it comes to raising capital, corporates have two major sources of external funds: Equity and Debt. Corporate debt consists of broadly two types – bank borrowings and bonds. A bond is a formal contract between a borrower and a lender whereby the borrower promises to repay borrowed money with coupons at fixed intervals and at maturity in which the participants are provided with the issuance and trading of debt securities. The main objective of this study is to understand how the growth in bond market affects the performance of the Bank in BRIICS countries. The variables like Bank’s capital to asset ratio, Domestic credit to private sector, NPA, Portfolio investment and Bond market size has been analysed and Panel regression has been used to find the results. The results showed that all the variables analysed have a positive impact on the bond market growth and a leading effect on the banks
Determinants of interest rate empirical evidence from pakistanAlexander Decker
This document summarizes a research paper that analyzes the determinants of interest rates in Pakistan. It begins with background definitions of key rate indicators like KIBOR and inflation. It then states the purpose is to study the determinants of interest rates, with the hypotheses that inflation and exchange rates have a positive impact on interest rates. The literature review summarizes several past studies on factors influencing interest rates in countries like Pakistan, Austria, and Japan. These studies examined the relationship between policy rates, market rates, inflation, and economic growth.
A causality analysis of financial deepening and performance ofAlexander Decker
This study examines the causal relationship between financial deepening and economic performance in Nigeria from 1990-2013. Secondary data on gross domestic product (GDP), broad money supply (M2), market capitalization (MAC), and credit to the private sector (CPS) was collected from the Central Bank of Nigeria and National Bureau of Statistics. Unit root tests confirmed the variables were integrated of order one, or stationary after first differencing. The study aims to test for a long-run relationship between financial deepening and economic performance in Nigeria and investigate the direction of causality between the variables. The results will help inform government policies around manipulating the money supply and improving access to credit to facilitate economic growth and development.
Bank consolidation and bank risk taking behaviourAlexander Decker
This study examines how bank consolidation and increased capital requirements in Nigeria have impacted bank risk-taking behavior. The researchers analyze panel data from Nigerian commercial banks before and after the 2004 banking reforms that increased minimum capital requirements and encouraged mergers. Their results show that higher capital levels promote bank stability but excessive loan loss provisions may indicate deteriorating loan quality. Bank size has a nonlinear effect on stability, and the consolidation period saw abnormal loan growth, suggesting moral hazard issues. The researchers conclude that capital reforms need effective regulation to prevent excessive risk-taking that could undermine stability gains.
This document provides an overview of the Chinese shadow banking system, including comparisons to past financial crises. It identifies key risk indicators such as rising house prices and refinancing risk. Scenario analysis highlights inherent risks, and possible solutions are discussed. The shadow banking system has grown rapidly in China in recent years through various products like wealth management programs and local government financing vehicles. There is concern about interconnected risks between banks and shadow banking and a potential crisis if the situation is not monitored closely.
The aim of this paper is to examine the impact of bank minimum capital requirement on credit supply in Ivory Coast, over the period from 1982 to 2016. To this end, the ARDL method was used to study the nature of the relationship between our explanatory variables and bank credit supply in Ivory Coast. The study indicates some major results. The results showed that in the short term, real GDP per capita and bank size influence credit supply in Ivory Coast. Real GDP per capita acts negatively on credit supply in the short run while bank size has a positive influence on banks’ capacity to finance the economy. In the long run, the Cooke ratio and the openness rate have an impact on bank credit supply in Ivory Coast. The recovery of bank minimum capital requirements positively influences bank credit supply while the openness of the economy negatively impacts banks’ ability to offer bank credit. In terms of economic policies implications, monetary authorities must enforce and respect the policy of increasing bank minimum capital requirements. They must encourage banks to increase their banking assets.
Banking sector developments in emerging markets a review of recent developmen...Alexander Decker
This document summarizes recent developments in the banking sector across Africa. It finds that financial deepening, as measured by indicators like private credit to GDP, has increased across the continent from 1999-2010, with the highest growth in North Africa. Banking sectors in North African countries like Egypt, Algeria, and Tunisia are dominated by large state-owned banks, while Morocco has a more private bank-dominated system. East and Central Africa generally lag behind other regions in terms of financial deepening indicators. The document provides statistics and analysis on banking sector trends in various African countries and regions.
Macroeconomic factors that affect the quality of lending in albania.Alexander Decker
This document analyzes the relationship between macroeconomic factors and credit quality in the Albanian banking system from 2005 to 2013. It finds that non-performing loan rates increased, influenced by the economic slowdown after 2008 and currency depreciation. Unemployment, lower GDP growth, reduced remittances, and inflation stability negatively impacted borrowers' ability to repay loans. A regression analysis showed credit risk significantly increased when GDP growth declined and interest rates rose. Macroeconomic changes, like deteriorating GDP growth, substantially affected the level of non-performing loans in Albanian banks.
How The Growth In Bond Market Affect The Performance Of Banks In Briics?inventionjournals
When it comes to raising capital, corporates have two major sources of external funds: Equity and Debt. Corporate debt consists of broadly two types – bank borrowings and bonds. A bond is a formal contract between a borrower and a lender whereby the borrower promises to repay borrowed money with coupons at fixed intervals and at maturity in which the participants are provided with the issuance and trading of debt securities. The main objective of this study is to understand how the growth in bond market affects the performance of the Bank in BRIICS countries. The variables like Bank’s capital to asset ratio, Domestic credit to private sector, NPA, Portfolio investment and Bond market size has been analysed and Panel regression has been used to find the results. The results showed that all the variables analysed have a positive impact on the bond market growth and a leading effect on the banks
Determinants of interest rate empirical evidence from pakistanAlexander Decker
This document summarizes a research paper that analyzes the determinants of interest rates in Pakistan. It begins with background definitions of key rate indicators like KIBOR and inflation. It then states the purpose is to study the determinants of interest rates, with the hypotheses that inflation and exchange rates have a positive impact on interest rates. The literature review summarizes several past studies on factors influencing interest rates in countries like Pakistan, Austria, and Japan. These studies examined the relationship between policy rates, market rates, inflation, and economic growth.
A causality analysis of financial deepening and performance ofAlexander Decker
This study examines the causal relationship between financial deepening and economic performance in Nigeria from 1990-2013. Secondary data on gross domestic product (GDP), broad money supply (M2), market capitalization (MAC), and credit to the private sector (CPS) was collected from the Central Bank of Nigeria and National Bureau of Statistics. Unit root tests confirmed the variables were integrated of order one, or stationary after first differencing. The study aims to test for a long-run relationship between financial deepening and economic performance in Nigeria and investigate the direction of causality between the variables. The results will help inform government policies around manipulating the money supply and improving access to credit to facilitate economic growth and development.
Bank consolidation and bank risk taking behaviourAlexander Decker
This study examines how bank consolidation and increased capital requirements in Nigeria have impacted bank risk-taking behavior. The researchers analyze panel data from Nigerian commercial banks before and after the 2004 banking reforms that increased minimum capital requirements and encouraged mergers. Their results show that higher capital levels promote bank stability but excessive loan loss provisions may indicate deteriorating loan quality. Bank size has a nonlinear effect on stability, and the consolidation period saw abnormal loan growth, suggesting moral hazard issues. The researchers conclude that capital reforms need effective regulation to prevent excessive risk-taking that could undermine stability gains.
This document provides an overview of the Chinese shadow banking system, including comparisons to past financial crises. It identifies key risk indicators such as rising house prices and refinancing risk. Scenario analysis highlights inherent risks, and possible solutions are discussed. The shadow banking system has grown rapidly in China in recent years through various products like wealth management programs and local government financing vehicles. There is concern about interconnected risks between banks and shadow banking and a potential crisis if the situation is not monitored closely.
The aim of this paper is to examine the impact of bank minimum capital requirement on credit supply in Ivory Coast, over the period from 1982 to 2016. To this end, the ARDL method was used to study the nature of the relationship between our explanatory variables and bank credit supply in Ivory Coast. The study indicates some major results. The results showed that in the short term, real GDP per capita and bank size influence credit supply in Ivory Coast. Real GDP per capita acts negatively on credit supply in the short run while bank size has a positive influence on banks’ capacity to finance the economy. In the long run, the Cooke ratio and the openness rate have an impact on bank credit supply in Ivory Coast. The recovery of bank minimum capital requirements positively influences bank credit supply while the openness of the economy negatively impacts banks’ ability to offer bank credit. In terms of economic policies implications, monetary authorities must enforce and respect the policy of increasing bank minimum capital requirements. They must encourage banks to increase their banking assets.
Banking sector developments in emerging markets a review of recent developmen...Alexander Decker
This document summarizes recent developments in the banking sector across Africa. It finds that financial deepening, as measured by indicators like private credit to GDP, has increased across the continent from 1999-2010, with the highest growth in North Africa. Banking sectors in North African countries like Egypt, Algeria, and Tunisia are dominated by large state-owned banks, while Morocco has a more private bank-dominated system. East and Central Africa generally lag behind other regions in terms of financial deepening indicators. The document provides statistics and analysis on banking sector trends in various African countries and regions.
An analysis of the challenges faced by banks in managing credit in zimbabweAlexander Decker
This document analyzes the challenges faced by banks in managing credit in Zimbabwe after the introduction of a multicurrency system in 2009. It discusses how the multicurrency regime has limited the central bank's ability to inject liquidity into banks. The study examines banks' loan-to-deposit ratios and levels of non-performing loans. Through a survey of banks, the study finds that low lending levels and increasing non-performing loans pose credit risks for banks. Statistical analysis supports the hypothesis that higher lending exposes banks to greater risk of non-performing loans. The challenges of credit management in Zimbabwe's unstable economic environment are also discussed.
This document summarizes a study that investigated the determinants of commercial bank lending behavior in Nigeria. The study aimed to test how common factors like deposits, investments, interest rates, reserve requirements, and liquidity ratios affect bank lending. Regression analysis found the model to be significant, with deposits having the greatest impact on lending. The study suggests banks focus on deposit mobilization to enhance lending performance and develop strategic plans.
The document provides an overview and analysis of the competitive landscape of the Zimbabwean banking sector in 2013. It discusses the structure and performance of the banking sector, comparing it to other countries in the region. While the sector has remained sound, banks are facing challenges from the uncertain political environment and tight liquidity conditions. The ability to mobilize cheaper credit and diversify revenues will be important for banks going forward. The sector exhibits monopolistic and oligopolistic characteristics, with the potential for electronic banking to provide future opportunities.
How is Mortgage Lending Influencing the Economic Growth in AlbaniaEditor IJCATR
Banks in Albania have been playing an important role in providing credit to the households especially to the
housing sector and thereby contributing to the aggregate demand in the sector. Moreover, Albanian banks also extend
various types of loans against the individuals and corporate before the financial crisis. After the crisis the banks become
more restricted due to increase of non-performing loans as well as the macroeconomic volatility which is higher in
emerging economies like Albania. In my study I will focus on the influence of mortgage loans and nonperforming loans
in the country economic growth during the interval 2008-2013 that corresponds with the after crisis period.
This document provides an overview of the Pakistani banking sector in 2013. It contains several articles and interviews on topics related to economics, finance, and banking in Pakistan. The editor's note provides commentary on the State Bank of Pakistan's economic review and monetary policies. It questions whether sufficient monitoring of the financial market has occurred and why credit growth has failed to support SMEs and regional development. The banking sector has shown strong performance but economic growth has been sluggish since 2007. Overall, the document examines issues facing the banking industry and economy in Pakistan.
This document discusses empirical research on the determinants of bank lending across countries. It proposes estimating equations to model domestic credit levels based on bank balance sheet and capital requirements approaches. The analysis will use data from 146 countries over 1990-2013 to examine how economic growth, banking system health, and external capital flows influence domestic credit after controlling for other factors. Key determinants expected to impact credit include deposits, interest rates, costs, capital levels, and macroeconomic conditions.
This document summarizes a study that examined the determinants of commercial bank lending in Ethiopia between 2005-2011. The study tested whether bank size, credit risk, GDP, investment, deposit, interest rate, liquidity ratio, and cash reserve requirements influenced bank lending. It found that bank size, credit risk, GDP, and liquidity ratio had a significant relationship with lending, but deposit, investment, interest rate, and cash reserves did not. The study suggests banks focus on managing credit risk and liquidity to support lending.
With banks being the major avenue that the CBK relies on to execute monetary policy, the paper
sought to investigate whether commercial banks are actually responsive to monetary policy.
The study used an Error Correctional Model to estimate a relationship where lending rates were
treated as the dependent variable while the independent variables were monetary policy,
specifically CBR. The model was also expanded to include additional independent variables
specifically monetary policy transmission channels. These include the credit channel which is
represented by credit to the private sector, exchange rate channel represented as nominal
exchange rate and asset price channel. For consistency, inflation and economic growth were
included in the model because these are the targets of monetary policy.The study findings
showed that there was a long run relationship between lending rates and Central Bank Rate,
Exchange Rates, Asset Price, Credit to the Private Sector, Economic growth and Inflation Rates.
The results also indicated that CBRand Inflation cause lending rates to increase in the short run
while credit to the private sector causes lending rates to decrease in the short run. A statistically
significant relationship was also established between lending rates and CBR, credit to the
private sector. The study concludes that commercial banks’ lending rates are indeed positively
responsive to CBR and that in order to spur economic growth; commercial banks’ lending rates
should be stabilized by streamlining the economic environment in which commercial banks
operate, therefore ensuring stable rates of borrowing.
This document discusses a study examining the impact of monetary policy on the financial performance of banks in Pakistan from 2007-2011. It uses interest rates set by the State Bank of Pakistan as a measure of monetary policy. The study finds that higher interest rates, representing a tighter monetary policy, have a significant negative relationship with banks' financial performance as measured by their return on assets and return on equity. The document provides background on monetary policy, its tools of expanding or contracting the money supply, and how interest rates can affect bank risk-taking and performance. It also reviews prior literature finding that higher capitalized banks may increase risk-taking less in response to lower rates than other banks.
This thesis investigates the determinants of lending behavior among commercial banks in Ethiopia. The author conducted a case study of eight commercial banks over the period of 2001 to 2013. Through a panel data regression analysis, the author found that deposit volume and bank size had a positive and significant impact on loans and advances. Liquidity ratio and interest rate had a negative and significant impact. Cash reserve requirements and inflation rate had a positive impact, though the relationship was unexpected. GDP growth did not have a statistically significant impact. The study suggests commercial banks focus on deposit mobilization to enhance lending.
The document summarizes opportunities and challenges in Mongolia's banking sector. It notes that Mongolia has a young population and vast mineral resources fueling rapid economic growth. The banking sector is also growing quickly but faces challenges like small bank capital sizes, underdeveloped markets, and inconsistent government policies. However, opportunities exist through partnerships, new products, and Mongolia's continued economic expansion.
Impact of Liquidity crisis to commercial banks in ZimbabweAleck Makandwa
A research carried out by a 2:2 student studying Banking and Finance at Great Zimbabwe Universty which can help Bankers and those who are interested in Banking System to know about the effects of Liquidity crisis to commercial banks in Zimbabwe.....
Impact analysis of interest rate on the net assets of multinational businesse...Alexander Decker
This document summarizes a research study that examined the impact of interest rates on the net assets of multinational businesses in Nigeria from 1995 to 2010. A regression model was used to analyze the relationship between net asset value index and interest rates based on financial data from 7 randomly sampled multinational companies. The regression analysis showed that increases in interest rates resulted in reductions in net assets. Therefore, interest rates provide important information for multinational companies about profitability and maintaining the right debt-equity mix to remain competitive.
This document summarizes the challenges and opportunities facing Mongolian banks and financial institutions given the country's rapidly growing economy. It notes that while Mongolia has experienced double-digit GDP growth, fueled by expansionary monetary and fiscal policies, the economy faces macroeconomic imbalances and volatility from its dependence on mining. Banks dominate the financial sector but have small capital bases. The government has implemented price stabilization and mortgage programs to boost the economy, impacting bank liquidity and loan growth. Rating agencies view Mongolia's banking system outlook negatively due to ties to the government's creditworthiness and narrow economic focus. Challenges include an underdeveloped non-banking sector and legal framework, while opportunities include cooperation with international partners and
The long run impact of bank credit on economic growth in ethiopia evidence f...Alexander Decker
This document analyzes the long-run impact of bank credit on economic growth in Ethiopia from 1971/72 to 2010/11 using a multivariate cointegration approach. The results support a positive relationship between bank credit and economic growth, with bank credit affecting growth through both higher investment and more efficient resource allocation. Deposit liabilities were also found to positively impact long-run growth. Control variables like human capital, domestic capital, and trade openness positively impacted growth, while inflation and government spending negatively impacted growth. The findings imply policymakers should focus on developing Ethiopia's banking sector to promote domestic investment and long-run economic growth.
This document summarizes a research paper that analyzed the determinants of credit risk in the Indonesian banking industry. Specifically, it examined how bank-specific variables like bank size, profitability, capital adequacy, and ownership structure influence the level of non-performing loans (NPL), which is used as a measure of credit risk. The document reviews several previous studies that also analyzed the relationship between credit risk and bank-specific factors in other countries. It then outlines the methodology that will be used in the research, including the data collection and analysis methods.
The application of real estate as loan collateral in nigeria’s banking sectorAlexander Decker
This document discusses the use of real estate as loan collateral in Nigeria's banking sector. It finds that real estate is the most widely used collateral instrument for bank loans in Nigeria. Banks follow due process when applying real estate as collateral, requiring documentation of borrower title and assessing property value. However, documentation and foreclosure problems present obstacles. The role of real estate as collateral is significant in developing countries due to difficulties in using movable assets as collateral. Overall title, nature of title, and property value are key considerations for banks when applying real estate as loan security.
This document appears to be a student project report submitted for a Master's degree in business administration. It discusses capital markets, with a focus on stock exchanges in India. The 3-page document includes sections on the role of capital markets in India, factors affecting Indian capital markets, an overview of stock exchanges in India, concepts of efficiency in capital markets, and mutual funds as part of capital markets. It also lists topics that will be discussed in the project report such as investment strategies for mutual funds and the research methodology used.
This document appears to be a student project report submitted for a Master's degree in business administration. It discusses capital markets, with a focus on stock exchanges in India. The 3-page document includes sections on the role of capital markets in India, factors affecting Indian capital markets, an overview of stock exchanges in India, concepts of efficiency in capital markets, and mutual funds as part of capital markets. It also lists topics that will be discussed in the project report such as investment strategies for mutual funds and the research methodology used.
An analysis of the challenges faced by banks in managing credit in zimbabweAlexander Decker
This document analyzes the challenges faced by banks in managing credit in Zimbabwe after the introduction of a multicurrency system in 2009. It discusses how the multicurrency regime has limited the central bank's ability to inject liquidity into banks. The study examines banks' loan-to-deposit ratios and levels of non-performing loans. Through a survey of banks, the study finds that low lending levels and increasing non-performing loans pose credit risks for banks. Statistical analysis supports the hypothesis that higher lending exposes banks to greater risk of non-performing loans. The challenges of credit management in Zimbabwe's unstable economic environment are also discussed.
This document summarizes a study that investigated the determinants of commercial bank lending behavior in Nigeria. The study aimed to test how common factors like deposits, investments, interest rates, reserve requirements, and liquidity ratios affect bank lending. Regression analysis found the model to be significant, with deposits having the greatest impact on lending. The study suggests banks focus on deposit mobilization to enhance lending performance and develop strategic plans.
The document provides an overview and analysis of the competitive landscape of the Zimbabwean banking sector in 2013. It discusses the structure and performance of the banking sector, comparing it to other countries in the region. While the sector has remained sound, banks are facing challenges from the uncertain political environment and tight liquidity conditions. The ability to mobilize cheaper credit and diversify revenues will be important for banks going forward. The sector exhibits monopolistic and oligopolistic characteristics, with the potential for electronic banking to provide future opportunities.
How is Mortgage Lending Influencing the Economic Growth in AlbaniaEditor IJCATR
Banks in Albania have been playing an important role in providing credit to the households especially to the
housing sector and thereby contributing to the aggregate demand in the sector. Moreover, Albanian banks also extend
various types of loans against the individuals and corporate before the financial crisis. After the crisis the banks become
more restricted due to increase of non-performing loans as well as the macroeconomic volatility which is higher in
emerging economies like Albania. In my study I will focus on the influence of mortgage loans and nonperforming loans
in the country economic growth during the interval 2008-2013 that corresponds with the after crisis period.
This document provides an overview of the Pakistani banking sector in 2013. It contains several articles and interviews on topics related to economics, finance, and banking in Pakistan. The editor's note provides commentary on the State Bank of Pakistan's economic review and monetary policies. It questions whether sufficient monitoring of the financial market has occurred and why credit growth has failed to support SMEs and regional development. The banking sector has shown strong performance but economic growth has been sluggish since 2007. Overall, the document examines issues facing the banking industry and economy in Pakistan.
This document discusses empirical research on the determinants of bank lending across countries. It proposes estimating equations to model domestic credit levels based on bank balance sheet and capital requirements approaches. The analysis will use data from 146 countries over 1990-2013 to examine how economic growth, banking system health, and external capital flows influence domestic credit after controlling for other factors. Key determinants expected to impact credit include deposits, interest rates, costs, capital levels, and macroeconomic conditions.
This document summarizes a study that examined the determinants of commercial bank lending in Ethiopia between 2005-2011. The study tested whether bank size, credit risk, GDP, investment, deposit, interest rate, liquidity ratio, and cash reserve requirements influenced bank lending. It found that bank size, credit risk, GDP, and liquidity ratio had a significant relationship with lending, but deposit, investment, interest rate, and cash reserves did not. The study suggests banks focus on managing credit risk and liquidity to support lending.
With banks being the major avenue that the CBK relies on to execute monetary policy, the paper
sought to investigate whether commercial banks are actually responsive to monetary policy.
The study used an Error Correctional Model to estimate a relationship where lending rates were
treated as the dependent variable while the independent variables were monetary policy,
specifically CBR. The model was also expanded to include additional independent variables
specifically monetary policy transmission channels. These include the credit channel which is
represented by credit to the private sector, exchange rate channel represented as nominal
exchange rate and asset price channel. For consistency, inflation and economic growth were
included in the model because these are the targets of monetary policy.The study findings
showed that there was a long run relationship between lending rates and Central Bank Rate,
Exchange Rates, Asset Price, Credit to the Private Sector, Economic growth and Inflation Rates.
The results also indicated that CBRand Inflation cause lending rates to increase in the short run
while credit to the private sector causes lending rates to decrease in the short run. A statistically
significant relationship was also established between lending rates and CBR, credit to the
private sector. The study concludes that commercial banks’ lending rates are indeed positively
responsive to CBR and that in order to spur economic growth; commercial banks’ lending rates
should be stabilized by streamlining the economic environment in which commercial banks
operate, therefore ensuring stable rates of borrowing.
This document discusses a study examining the impact of monetary policy on the financial performance of banks in Pakistan from 2007-2011. It uses interest rates set by the State Bank of Pakistan as a measure of monetary policy. The study finds that higher interest rates, representing a tighter monetary policy, have a significant negative relationship with banks' financial performance as measured by their return on assets and return on equity. The document provides background on monetary policy, its tools of expanding or contracting the money supply, and how interest rates can affect bank risk-taking and performance. It also reviews prior literature finding that higher capitalized banks may increase risk-taking less in response to lower rates than other banks.
This thesis investigates the determinants of lending behavior among commercial banks in Ethiopia. The author conducted a case study of eight commercial banks over the period of 2001 to 2013. Through a panel data regression analysis, the author found that deposit volume and bank size had a positive and significant impact on loans and advances. Liquidity ratio and interest rate had a negative and significant impact. Cash reserve requirements and inflation rate had a positive impact, though the relationship was unexpected. GDP growth did not have a statistically significant impact. The study suggests commercial banks focus on deposit mobilization to enhance lending.
The document summarizes opportunities and challenges in Mongolia's banking sector. It notes that Mongolia has a young population and vast mineral resources fueling rapid economic growth. The banking sector is also growing quickly but faces challenges like small bank capital sizes, underdeveloped markets, and inconsistent government policies. However, opportunities exist through partnerships, new products, and Mongolia's continued economic expansion.
Impact of Liquidity crisis to commercial banks in ZimbabweAleck Makandwa
A research carried out by a 2:2 student studying Banking and Finance at Great Zimbabwe Universty which can help Bankers and those who are interested in Banking System to know about the effects of Liquidity crisis to commercial banks in Zimbabwe.....
Impact analysis of interest rate on the net assets of multinational businesse...Alexander Decker
This document summarizes a research study that examined the impact of interest rates on the net assets of multinational businesses in Nigeria from 1995 to 2010. A regression model was used to analyze the relationship between net asset value index and interest rates based on financial data from 7 randomly sampled multinational companies. The regression analysis showed that increases in interest rates resulted in reductions in net assets. Therefore, interest rates provide important information for multinational companies about profitability and maintaining the right debt-equity mix to remain competitive.
This document summarizes the challenges and opportunities facing Mongolian banks and financial institutions given the country's rapidly growing economy. It notes that while Mongolia has experienced double-digit GDP growth, fueled by expansionary monetary and fiscal policies, the economy faces macroeconomic imbalances and volatility from its dependence on mining. Banks dominate the financial sector but have small capital bases. The government has implemented price stabilization and mortgage programs to boost the economy, impacting bank liquidity and loan growth. Rating agencies view Mongolia's banking system outlook negatively due to ties to the government's creditworthiness and narrow economic focus. Challenges include an underdeveloped non-banking sector and legal framework, while opportunities include cooperation with international partners and
The long run impact of bank credit on economic growth in ethiopia evidence f...Alexander Decker
This document analyzes the long-run impact of bank credit on economic growth in Ethiopia from 1971/72 to 2010/11 using a multivariate cointegration approach. The results support a positive relationship between bank credit and economic growth, with bank credit affecting growth through both higher investment and more efficient resource allocation. Deposit liabilities were also found to positively impact long-run growth. Control variables like human capital, domestic capital, and trade openness positively impacted growth, while inflation and government spending negatively impacted growth. The findings imply policymakers should focus on developing Ethiopia's banking sector to promote domestic investment and long-run economic growth.
This document summarizes a research paper that analyzed the determinants of credit risk in the Indonesian banking industry. Specifically, it examined how bank-specific variables like bank size, profitability, capital adequacy, and ownership structure influence the level of non-performing loans (NPL), which is used as a measure of credit risk. The document reviews several previous studies that also analyzed the relationship between credit risk and bank-specific factors in other countries. It then outlines the methodology that will be used in the research, including the data collection and analysis methods.
The application of real estate as loan collateral in nigeria’s banking sectorAlexander Decker
This document discusses the use of real estate as loan collateral in Nigeria's banking sector. It finds that real estate is the most widely used collateral instrument for bank loans in Nigeria. Banks follow due process when applying real estate as collateral, requiring documentation of borrower title and assessing property value. However, documentation and foreclosure problems present obstacles. The role of real estate as collateral is significant in developing countries due to difficulties in using movable assets as collateral. Overall title, nature of title, and property value are key considerations for banks when applying real estate as loan security.
This document appears to be a student project report submitted for a Master's degree in business administration. It discusses capital markets, with a focus on stock exchanges in India. The 3-page document includes sections on the role of capital markets in India, factors affecting Indian capital markets, an overview of stock exchanges in India, concepts of efficiency in capital markets, and mutual funds as part of capital markets. It also lists topics that will be discussed in the project report such as investment strategies for mutual funds and the research methodology used.
This document appears to be a student project report submitted for a Master's degree in business administration. It discusses capital markets, with a focus on stock exchanges in India. The 3-page document includes sections on the role of capital markets in India, factors affecting Indian capital markets, an overview of stock exchanges in India, concepts of efficiency in capital markets, and mutual funds as part of capital markets. It also lists topics that will be discussed in the project report such as investment strategies for mutual funds and the research methodology used.
This document appears to be a student project report submitted for a Master's degree in business administration. It discusses capital markets, with a focus on stock exchanges in India. The 3-page document includes sections on the role of capital markets in India, factors affecting Indian capital markets, an overview of stock exchanges in India, concepts of efficiency in capital markets, and mutual funds as part of capital markets. It also lists topics that will be discussed in the project report such as investment strategies for mutual funds and the research methodology used.
A PROJECT ON CAPITAL MARKET by BARSA MAHAKUD.docxBarsaMahakud
This document discusses a student project on capital markets submitted for a bachelor's degree in commerce. It includes sections on the capital market, debt/bond market, equity/stock market, and an index listing additional sections on capital market efficiency, mutual funds, investment strategies, and more. The project was submitted by Barsa Mahakud to fulfill the requirements for a bachelor's degree in commerce from Sambalpur University, Burla, Sambalpur.
Foreign financial resources inflows and stock market development empirical ev...Alexander Decker
This study empirically investigates the effects of foreign financial resource inflows on stock market development in Nigeria and Ghana between 1988-2011 for Nigeria and 1991-2011 for Ghana. Using market capitalization to GDP ratio as a proxy for stock market development and multiple linear regression analysis, the study finds that foreign direct investment, foreign portfolio investment, personal remittances, and official development assistance were positively related to stock market development in Nigeria, though official development assistance was insignificant. In Ghana, foreign direct investment, personal remittances, and external debt were negatively related to stock market development, while official development assistance was positively related. The study aims to contribute to existing literature by investigating the effects of multiple components of foreign financial inflows on stock
Informality and bank performance in nigeria a panel data analysisAlexander Decker
This document analyzes the impact of informality on the performance of banks in Nigeria. It begins with an abstract that summarizes the study's objectives and main findings. The introduction provides background on the important role of banks in an economy and issues with Nigeria's banking sector. It states that the study aims to empirically examine how the large informal sector in Nigeria impacts bank performance.
The document then reviews four main theories on informality (modernization, dependency, structuralism, and neoliberalism) and discusses the characteristics of Nigeria's large informal economy. It finds that informality negatively impacts bank profitability and returns on assets. The conclusion recommends that banks work to better capture economic activity in the informal sector and that government
A causality analysis of financial deepening and performance ofAlexander Decker
This study examines the causal relationship between financial deepening and economic performance in Nigeria from 1990-2013. Secondary data on gross domestic product (GDP), broad money supply (M2), market capitalization (MAC), and credit to the private sector (CPS) was collected from the Central Bank of Nigeria and National Bureau of Statistics. Unit root tests confirmed the variables were integrated of order one, or stationary after first differencing. The study aims to test for a long-run relationship between financial deepening and economic performance in Nigeria and investigate the direction of causality between the variables. The results will help inform government policies around manipulating the money supply and improving access to credit to facilitate economic growth and development.
Capital Market and Economic Growth Nexus: Evidence from Nigeriaiosrjce
IOSR Journal of Business and Management (IOSR-JBM) is a double blind peer reviewed International Journal that provides rapid publication (within a month) of articles in all areas of business and managemant and its applications. The journal welcomes publications of high quality papers on theoretical developments and practical applications inbusiness and management. Original research papers, state-of-the-art reviews, and high quality technical notes are invited for publications
Stock market performance of some selected nigerian commercial banks amidst ec...Alexander Decker
This document summarizes a research study that assessed the stock market performance of selected Nigerian commercial banks from 2007 to 2010, a period of economic turbulence in Nigeria coinciding with the global financial crisis. The study examined stock price trends of 8 banks and whether performance differed between banks. It found that stock prices declined significantly from May 2008 for all banks. Banks facing financial troubles showed greater weakness in stock prices than healthy banks. The turbulence likely caused investors to lose confidence and reduce shareholdings. The study concluded that governments should act proactively to address threats to investment during periods of economic instability.
Capital Market and Economic Growth in Nigeria A Causal Analysis 1987 – 2021ijtsrd
The study investigated the effect of capital market on economic growth in Nigeria. It also determined the causal relationship between capital markets on economic growth. The study covered the liberalised economic era in Nigeria starting from 1987 to 2021. The study employed new issues, market size, market liquidity, market volatility and bond market size as proxies for capital market to determine the nexus with economic growth. Data were obtained from the Central Bank of Nigeria statistical bulletin and analysed using the ARDL regression and granger causality tests. The results showed that 1 New Issues has no significant long and short run effects on economic growth but economic growth granger causes new issues, 2 Stock Market Size has a negative long run significant effect a mixed short run effect of positive in the initial period and negative in later years but no causal relationship with economic growth, 3 Stock Market liquidity has significant and positive long run and short run effects but no causal relationship with economic growth, 4 Stock Market Volatility has insignificant negative long run effect a mixed positive and then negative effect in the short run but no causal relationship with economic growth, and 5 Bond Market Size has significant and negative long run and short run effects but no causal relationship with economic growth in Nigeria. The study concluded that capital market follows the demand following hypothesis as economic growth determines one of the capital market variables new issues . The capital market size, liquidity and volatility have no causal relationship with economic growth which depicts the neutrality hypothesis that the financial market nee capital market and economic growth has no recourse to each other in development. The recommendations put forward by the study include that existing firms in Nigeria should be encouraged to assess the capital market for business financing and the need for effective supervision of stock market activities. The outcome of the study contributed immensely to new knowledge in capital market and economic growth nexus by debunking the sought after finance led theory in support that the development of the capital market should drive economic growth. Ike, Ngozi Ann | Chukwunulu, Jessie Ijeoma "Capital Market and Economic Growth in Nigeria: A Causal Analysis (1987 – 2021)" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-6 , October 2022, URL: https://www.ijtsrd.com/papers/ijtsrd51909.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/51909/capital-market-and-economic-growth-in-nigeria-a-causal-analysis-1987-–-2021/ike-ngozi-ann
Assessment of the impact of universal banking on bank performance in nigeriaAlexander Decker
Universal banking was adopted in Nigeria in 1999 to allow banks to expand their activities and strengthen their ability to stimulate economic growth. This paper assesses the impact of universal banking on bank performance in Nigeria from 2001 to 2010. It employs surveys and regression analysis of 24 banks during this period. The findings show that universal banking enhanced real sector funding, reduced bank failures, and improved bank performance. However, universal banking also faced many challenges after its implementation in Nigeria.
Volume of Deposits, A determinant of Total Long-term Loans Advanced by Commer...iosrjce
Commercial banks have exponentially increased their total loans advanced over the period 2002-
2013. However commercial banks in Kenya have shown varying long term lending behavior. The main objective
of this study was to establish the effect of determinants of long term lending in the Kenyan banking industry, a
case of Bungoma County. This study was guided by the following specific objective; to determine the effect of
volume of deposit on total loan advanced, of selected commercial banks in Kenya. The target population
comprised 13 commercial banks in Bungoma County with a sample size of 52 respondents. From the findings,
for every unit increase in volume of deposits, a 10.9%, unit increase in total loans advanced is predicted. The
model hypothesizes that there is functional relationship between the dependent variable and the independent
variable. The study then recommends that commercial banks should focus on mobilizing more deposits as this
will enhance their lending performance.
This document provides background information and context for a study examining the determinants of banking crises in Nigeria. It begins with an introduction that discusses the important role of banks in economic growth and development. However, it notes that banking nowadays faces many challenges that can lead to crises.
The document then reviews literature on past banking crises in Nigeria. It discusses factors that previous studies have identified as contributing to crises, such as lack of transparency, capital inadequacy, and non-performing loans. It also outlines the objectives, research questions, and hypotheses that will guide the current study.
Finally, the document provides operational definitions of key terms and concludes Chapter 1 by discussing the significance, scope, and limitations
An Empirical Study on the Relationship between Financial Intermediaries and E...iosrjce
The study empirically investigated the relationship between financial intermediaries and economic
growth in Nigeria. Annual time series data covering 1970 to 2013 were used to analyze the long run and short
run relationship between the development of financial intermediaries and economic growth along with the
direction of causality between the indicators. The results of the unit root test show that the variables are
integrated at I(1). Cointegration is being found between the series in the presence of a structural break in 1987,
1992 and 1996. Using bound testing technique for cointegration a stable long-run relationship was found
between the indicators of financial intermediaries and the economic growth. Error correction coefficient was
statistically significant. It was concluded that insurance premium and value of stock transaction have a positive
impact on economic growth in both short runs and long-run. However, bank credit has a negative influence on
economic growth. The causality test reveals a bi-directional relationship between bank credit and economic
growth while a unidirectional causality moves from economic growth to insurance premium and value of stock
transactions. Here remains an important policy implication for the concerned individuals of Nigeria, that is,
they have to emphasize in financial development to ignite economic growth.
An examination of the unit trust scheme mutual fund as a veritable vehicle of...Alexander Decker
This document examines unit trust/mutual funds as an investment vehicle in the Nigerian stock market. It begins with an abstract that provides background on Nigeria's economy and the growth of its capital markets in the 1990s and 2000s. It then discusses how many individual investors lacked skills and diversification during the global financial crisis, resulting in large losses. The document aims to examine unit trusts as a suitable investment option for small savers and less sophisticated investors. It finds there is a lack of awareness and poor patronage of unit trusts in Nigeria and that more education is needed. The document also notes that unit trusts could help mobilize funds and the economy would benefit from strengthened legal/accounting frameworks around these types of investments.
The relationship between regulatory inconsistencies and nigerian banking indu...Alexander Decker
This document summarizes a research study on the relationship between regulatory inconsistencies and the Nigerian banking industry. The study finds that inconsistencies among the Central Bank of Nigeria, Nigeria Deposit Insurance Corporation, and other regulatory bodies have not ensured effective and efficient banking practices in Nigeria. Each new administrative regime introduces new banking regulations that are later abandoned, contributing to bank distress and failure. The document provides background on banking regulation in Nigeria and objectives of bank regulation.
The Need for Financial Stability in Zimbabwe: Use of Derivatives Securitiesiosrjce
Financial stability contributes to the stability and growth of a nation. There has been a sharp growth
in use or trading of derivatives in both mature and emerging markets. The Zimbabwean financial sector is still
not trading in derivatives security, yet Zimbabwe Stock Exchange is among the oldest and largest in Africa.The
trading of derivatives is done in two types of markets: organized exchanges and over the counter.Investors
generally use derivatives for three purposes: risk management, price discovery, and reduction of transaction
costs.Apart from generating cash in the adverse states of the world, derivative instruments also can smooth cash
flows through its interaction with the operating decisions. The study rallies behind the development of
derivatives market in Zimbabwe in the face of liquidity challenges currently facing the economy. The impact of
market risk on corporate activities should never be undermined and hence the corporate sector should be aided
in the elimination of market risk. The study is a policy prescription, which examines the importance of
derivatives and their suitability in Zimbabwe, to strengthen the financial sector. The study identified the
derivatives sector as the missing link to viable financial sector and hence economic growth.
This document examines the relationship between capital market development and economic growth in Nigeria from 2008 to 2018. It uses market capitalization, interest rate, and inflation rate as proxies for capital market development and GDP as the measure of economic growth. Multiple regression analysis is employed to analyze the data. The results suggest that the stock market has a positive but insignificant effect on economic growth in Nigeria. It is recommended that capital market regulators be more flexible to promote innovation without compromising investor protection. The government should also improve infrastructure to create a better business environment and boost productivity and economic activity.
Similar to Assessment of Credit Risk Management System in Ethiopian Banking (20)
Mechatronics is a multidisciplinary field that refers to the skill sets needed in the contemporary, advanced automated manufacturing industry. At the intersection of mechanics, electronics, and computing, mechatronics specialists create simpler, smarter systems. Mechatronics is an essential foundation for the expected growth in automation and manufacturing.
Mechatronics deals with robotics, control systems, and electro-mechanical systems.
Prediction of Electrical Energy Efficiency Using Information on Consumer's Ac...PriyankaKilaniya
Energy efficiency has been important since the latter part of the last century. The main object of this survey is to determine the energy efficiency knowledge among consumers. Two separate districts in Bangladesh are selected to conduct the survey on households and showrooms about the energy and seller also. The survey uses the data to find some regression equations from which it is easy to predict energy efficiency knowledge. The data is analyzed and calculated based on five important criteria. The initial target was to find some factors that help predict a person's energy efficiency knowledge. From the survey, it is found that the energy efficiency awareness among the people of our country is very low. Relationships between household energy use behaviors are estimated using a unique dataset of about 40 households and 20 showrooms in Bangladesh's Chapainawabganj and Bagerhat districts. Knowledge of energy consumption and energy efficiency technology options is found to be associated with household use of energy conservation practices. Household characteristics also influence household energy use behavior. Younger household cohorts are more likely to adopt energy-efficient technologies and energy conservation practices and place primary importance on energy saving for environmental reasons. Education also influences attitudes toward energy conservation in Bangladesh. Low-education households indicate they primarily save electricity for the environment while high-education households indicate they are motivated by environmental concerns.
Accident detection system project report.pdfKamal Acharya
The Rapid growth of technology and infrastructure has made our lives easier. The
advent of technology has also increased the traffic hazards and the road accidents take place
frequently which causes huge loss of life and property because of the poor emergency facilities.
Many lives could have been saved if emergency service could get accident information and
reach in time. Our project will provide an optimum solution to this draw back. A piezo electric
sensor can be used as a crash or rollover detector of the vehicle during and after a crash. With
signals from a piezo electric sensor, a severe accident can be recognized. According to this
project when a vehicle meets with an accident immediately piezo electric sensor will detect the
signal or if a car rolls over. Then with the help of GSM module and GPS module, the location
will be sent to the emergency contact. Then after conforming the location necessary action will
be taken. If the person meets with a small accident or if there is no serious threat to anyone’s
life, then the alert message can be terminated by the driver by a switch provided in order to
avoid wasting the valuable time of the medical rescue team.
Software Engineering and Project Management - Software Testing + Agile Method...Prakhyath Rai
Software Testing: A Strategic Approach to Software Testing, Strategic Issues, Test Strategies for Conventional Software, Test Strategies for Object -Oriented Software, Validation Testing, System Testing, The Art of Debugging.
Agile Methodology: Before Agile – Waterfall, Agile Development.
Use PyCharm for remote debugging of WSL on a Windo cf5c162d672e4e58b4dde5d797...shadow0702a
This document serves as a comprehensive step-by-step guide on how to effectively use PyCharm for remote debugging of the Windows Subsystem for Linux (WSL) on a local Windows machine. It meticulously outlines several critical steps in the process, starting with the crucial task of enabling permissions, followed by the installation and configuration of WSL.
The guide then proceeds to explain how to set up the SSH service within the WSL environment, an integral part of the process. Alongside this, it also provides detailed instructions on how to modify the inbound rules of the Windows firewall to facilitate the process, ensuring that there are no connectivity issues that could potentially hinder the debugging process.
The document further emphasizes on the importance of checking the connection between the Windows and WSL environments, providing instructions on how to ensure that the connection is optimal and ready for remote debugging.
It also offers an in-depth guide on how to configure the WSL interpreter and files within the PyCharm environment. This is essential for ensuring that the debugging process is set up correctly and that the program can be run effectively within the WSL terminal.
Additionally, the document provides guidance on how to set up breakpoints for debugging, a fundamental aspect of the debugging process which allows the developer to stop the execution of their code at certain points and inspect their program at those stages.
Finally, the document concludes by providing a link to a reference blog. This blog offers additional information and guidance on configuring the remote Python interpreter in PyCharm, providing the reader with a well-rounded understanding of the process.
Generative AI Use cases applications solutions and implementation.pdfmahaffeycheryld
Generative AI solutions encompass a range of capabilities from content creation to complex problem-solving across industries. Implementing generative AI involves identifying specific business needs, developing tailored AI models using techniques like GANs and VAEs, and integrating these models into existing workflows. Data quality and continuous model refinement are crucial for effective implementation. Businesses must also consider ethical implications and ensure transparency in AI decision-making. Generative AI's implementation aims to enhance efficiency, creativity, and innovation by leveraging autonomous generation and sophisticated learning algorithms to meet diverse business challenges.
https://www.leewayhertz.com/generative-ai-use-cases-and-applications/
Generative AI Use cases applications solutions and implementation.pdf
Assessment of Credit Risk Management System in Ethiopian Banking
1. International Journal of Business and Management Invention
ISSN (Online): 2319 – 8028, ISSN (Print): 2319 – 801X
www.ijbmi.org || Volume 6 Issue 4 || April. 2017 || PP—88-97
www.ijbmi.org 88 | Page
Selected Macroeconomic Factors versus Bond Market
Development in Nigeria
Friday E. Nkwede
Department of Accountancy, Banking & Finance, Faculty of Management Sciences, Ebonyi State University,
Abakaliki, Nigeria
Abstract: This paper examines the macroeconomic determinants of bond market development in Nigeria to
address the persistent research question of whether bond market development is driven by macroeconomic
factors or institutional factors in emerging markets. Time series data generated over the period of 32 years was
analyzed using ordinary least square regression techniques involving multiple regressions. The aggregate bond
market capitalization comprising both government bonds and corporate bonds were exploited. The major
findings of the study reveals that exchange rate, interest rate, inflation rate and banking sector development
have negative and significant influence on the Nigerian bond market capitalization and as such, they
demonstrated strong evidence as robust macroeconomic determinants of bond market development in Nigeria.
Bond market, development, determinants, economy, Nigeria
Keywords: Economy, Bond market, corporate bond, Development, Nigeria, capital market
I.INTRODUCTION
The core tripartite roles of any-well-functioning financial markets toward economic growth are the viability of
bond market in mobilizing domestic and foreign sources of fund for investment. But surprisingly, most
emerging bond markets, including Nigerian bond market is yet to live up to the expectation of this mandate;
because the market is characterized by weak corporate mechanism, poor corporate governance, weak regulatory
framework and both economic and political instability (Kemboi and Tarus, 2012).
Apart from the long historical problem of shallow and inefficient bond market in Nigeria, the market is also
characterized by structural economic problem of bank-dominated economy as against market based-economy.
This problem as a matter of fact, has created undue over-reliance on banking finances (making banking sector
an absolute substitute for bond market instead of complement). The attendant consequence is that, it has made
Nigeria “vulnerable” on the global market. While emphasizing on the problem of bank-dominated economy in
most African countries, Eichengreen and Luengnamemitchai (2006:3) strongly argue that:
Domestically, banks have the weakness of being closely connected to business and
Political leaders but also the strength of long-standing relationships with borrowers. Bond
market has the opposite strengths and weakness: transaction are at arm’s length, often
between anonymous buyer and sellers, but access to the bond market as a source of
finance is available only to the largest, longest-established firms about whom the best
information is available. The banking system is ideally placed to provide patient finance;
such are the argument that financially mature economy should have diversified sources of
finance including both an efficient banking system and a well-developed bond market.
Further still, there is also a noticeable challenge of interest rate variability and exchange rate volatility in
the Nigerian bond market. For instance, the average exchange rate of naira per US dollar in the 1980s‟ was
0.6100% and 7.391% for lowest and highest rate respectively; and in the 90s. The average exchange rate
increased from 8.03783% in the beginning to 92.6934%. Till date, the exchange rate in Nigeria has remained
volatile (CBN, 2011). Similarly, interest rate and exchange rate in Nigeria is likened to a coin of same side as
interest rate variability has over the years persisted in Nigeria. As a matter of fact, the variability of interest rate
and exchange rate volatility perhaps may be responsible for the problem of underdevelopment of Nigerian bond
market.
Consequently, it seems complex for Nigeria and other African countries to finance critical projects from
bond market as alternative sources of finance since Nigeria have been heavily dependent on external grants and
concessional loans from donor agencies for funding capital spending and government deficits. As a result,
Nigerian local currency bond market appears relatively unattractive for foreign participation through foreign
direct investment (FDI). This problem is also exacerbated by the unfavorable exchange rate regime faced by
both local and foreign participant in the Nigerian bond market.
2. Macroeconomic Determinants of Bond Market Development: Evidence from Nigerian
www.ijbmi.org 89 | Page
The size and depth of Nigerian bond market is also another worrisome issue; coupled with the erosion of
public confidence brought about by inflationary pressures in the economy. While the size of the market is
comparatively small, there is even another twin challenge of government bond crowding out some existing
private/corporate bonds. The crowding out effect is no doubt multiple, since it affects both the non-bank
investors and private investors. The maturity and price arbitrariness problems are not also left out, since it can
further deteriorate the market confidence.
However, consistent with empirical literature, while most studies have often focused on stock market
development and economic growth, no known study have devoted attention to the determinants of bond market
development in Nigeria, to address basic issues like: 1) The drought of corporate bonds in the Nigerian bond
market, 2) The underdevelopment status of Nigerian bond market, 3) The preference of Nigerian banks to
source funds from capital market instead of bond market. For instance, in 2005 banks recapitalization Nigeria,
no bank sourced fund from the bond market; in a bank recapitalization that is acknowledged according to
Ezeoha (2011) as the biggest „industry convergence in the history of banking in Africa‟. In the light of the above
unresolved questions in the Nigerian bond market and the controversial and inconclusive reports on the
determinants of bond market development; this study is inspired to investigate what actually drive bond market
development in Nigeria from the macroeconomic perspective.
The banking sector, no doubt serves as the bond market dealer/marker; and as such, Nigerian banks appear to be
competing with Nigeria bond market in terms of fund provision and at the same time tend to deprive bond
market share because of overreliance on bank for funding in Nigeria (Hawkins, 2002). Moreso, Fiscal balance
brings about huge supply of government bond which in turn might be accountable for driving out corporate
bonds and if the development of corporate bond is distorted, the entire bond market is perhaps affected. In the
same way, savings basically is a prime factor for business investments and savings in Nigeria context constitute
a significant proportion of investable funds. For instance, the national providence funds, pension saved funds
among others are channeled into bond investment in Nigeria. Therefore, the mismanagement of the aggregate
savings in Nigeria may be responsible for underdevelopment of domestic bond market in Nigeria. Against this
backdrop, the fundamental question of what determines bond market development becomes imperative.
Therefore, it makes a research sense to find out, what actually drives bond market development in Nigeria from
the macroeconomic point of view, especially to ascertain the impact of these macroeconomic factors on bond
development.
II.REVIEW OF RELATED LITERATURE
By convention and in practice anchoring study of this nature on existing literature and theoretical framework
are usually indispensable. Therefore, empirical literature and theoretical structure upon which the study is
anchored will constitute the key parts of this literature.
2.1Conceptual Review
The concept of bond and bond market
Bond is a financial debt instrument (Ogilo, 2014). A borrower issues bond as an issuer; with the financial
obligation to pay back to the lender both the amount borrowed and interest with a defined time frame. The
lender is regarded as the investor. As a lender (investor) he buys the bond from the issuer. Therefore, in a
general simple market notion the bond issuer is the seller while the lender is the buyer. SEC (2010) specifically
opines that a bond is:
a generic name for a tradable loan security issued by governments and companies as a
means of raising capital. The bond is an interest bearing security. It guarantees its
holder both repayment of capital at a future specified date (Maturity date) and a fixed
rate of interest also known as the coupon.
On the other hand, bond market is interpreted as the environment where the issuance, buying and selling of
financial debt securities take place (Welch, 2009; cited in Ogilo, 2014). The bond market is alternatively called
debt market in financial terminology. According to Securities Industry and Financial Market Association,
SIFMA (2011) bond market could also be described as a component of financial market where participants can
issue new debt securities (regarded as the “primary market”) or buy and sell an existing debt securities known as
“secondary market”. In light of the above, it is perhaps unarguable that the overall goal of bond is the provision
of a mechanism for long term funding of public and private investments and expenditures. The maturity period
of bond market instruments ranges from 6 years to a maximum of thirty years depending on the type of the
instruments.
A typical bond market is composed of international bonds and domestic bonds. While the domestic bond
market is made up of the government bonds, corporate bonds and municipal bonds, the Eurobonds and other
global bonds makes up the international bonds (Ogilo, 2014).
3. Macroeconomic Determinants of Bond Market Development: Evidence from Nigerian
www.ijbmi.org 90 | Page
However, SIFMA classified the bond market into five broad categories namely-the corporate bonds market,
governments/agency bonds market, municipal bond market, mortgage backed/collateralized debt and funding.
All these categories and other various types of bonds shall be discussed in details in the main work as the
researcher proceeds. The participant in the bond market are government, corporate bodies, individuals,
institutional investors, traders among others, while the bond market instruments includes bills, notes among
others. The types of bonds that are currently being traded in Nigeria bond market are the federal government
bonds with current outstanding volume of 4,591.19 billion, agency bonds with current outstanding volume of
1,301.62 billion, sub-national bonds (state government bonds) with current outstanding volume of 483.24
billion, corporate bonds with an outstanding volume of 141.62 billion, corporate Eurobonds with outstanding
volume of 4,760.00 billion, FGN Eurobonds with outstanding volume of 1.500.00 billion (Egene and Abiodeen,
2014).
2.2 Empirical Review
Fink, Haiss and Hristoforova, (2003) studied the causal relationship between bond market development and
economic growth, using thirteen (13) most developed countries of the world including United State of America,
England, Switzerland, Germany, Austria, Netherland, Spain, Italy, Japan, Norway among other European
countries. They discovered an inter dependence relationship between bond market and real output in the case of
United State of America, United Kingdom, Switzerland Germany, Austria and Spain. In their methodology, they
applied bivariate autoregressive model for the purpose of determining the nature of their hypothesized causal
relationship between the bond sector development and economic growth. The period covered in their study span
from 1950 to 2000. The famous granger causality test was conducted in their analysis to actually define
causality in term of predictability. Meanwhile, in the final analysis, Fink et al (2003) discovered that there are
differences in the causality patterns of some of the countries in their sample. These differences were due to the
heterogeneity of market structures of European and Asian countries in sampled countries and also the difference
in the degree of openness and international integration of the capital market in the countries. For instance, while
there is one way direction of causality in the case of Norway, there is bi-directional causality in the case of
Finland, Japan and Italy. They also found that there is a reasonable support for supply-leading causality from the
bond market capitalization change to real growth in United States of America, Britain, Germany, Austria, and
Switzerland. This supply-leading causality was rather found to be very weak in countries like Netherlands and
Spain. Therefore, with supply-leading hypothesis found in the majority of the countries; it was concluded in
their study that real economic activity is significantly influenced by the development of the bond market. There
was no recommendation made for policy implications in the study.
Again, Adelegan and Radzewicezbak (2009) investigated what determines Bond market development in
sub-Saharan African with a sample of 23 sub-Saharan African (SSA) countries. One thing special about their
study is that they included factors like stages of economic development, economic size as well as historical,
structural and institutional variables into their OLS regression model. The result of the study reveals that savings
constraint is a major setback of domestic bond market development and financial market deepening in sub-
Saharan Africa. Adelegan and Radzewicezbak (2009) argue that these constraints have brought about „low level
of financial intermediation by banks‟. In conclusion, they indicated a „confluence of factors that play critical
role in the development of domestic bond market in SSA to include structure of the economy, investment
profile, law and order, size of the banking sector, the level of economic development and other various
macroeconomic factors. Regional integration of bond market in SSA was recommended in the study. Further,
Christensen (2004) studied Domestic Debt market in sub-Saharan Africa with the purpose of reviewing the
depth of African bond markets. The data bet of study was drawn from 27 sub-Saharan African countries with 20
observations (1980-2000). Findings from the study revealed that “domestic debt markets in these countries are
generally small, highly short-term in nature and often have a narrow investor base”. Moreso, the study supports
the argument that domestic government debt is effectively crowding out private sector lending.
Consequently Mu et al (2013) who worked on Bond market in Africa firmly argue that even though
African bond market has steady growth rate, but the market is still underdeveloped. While using an econometric
model in analysis of their data, they discovered that “government securities market capitalization is directly
related to better institutions and interest rate volatility, but inversely related to the fiscal balance, higher interest
rate spread, exchange rate volatility and capital account openness”. Interesting about Mu et al (2013) study is the
incorporation of basic institutional variables (corruption, rule of law, geographical/natural endowment,
bureaucracy etc) in their study.
Moreso, Eichengreen and Luengnamemitchai (2004) document that large country size, strong institutions,
less volatile exchange rate and more competitive banking sector show positive association with bond market
capitalization in Asian countries, while, fiscal balances is negatively associated with the growth of government
bonds in the Asian region.
4. Macroeconomic Determinants of Bond Market Development: Evidence from Nigerian
www.ijbmi.org 91 | Page
In Newserland, Dicke and Fan (2005) investigated the factors that are associated with the development of
corporate debt market while working on the topic “Banks and corporate debt market development”. In their
study, they made use of panel data covering 30 countries from 1989-2002. The major crux of their study was to
found out the relationship between banking sector structure and corporate bond market development. They
classified corporate bond market development along other possible determinants of bond market development to
include: Market players (-such as global corporation, government commitments, public debt market and
institutional investors); institutions (such as legal system, and credit rights), Economic interrelationships and
incentives (such as mergers and acquisition, per capita income, defined contribution schemes, corporate tax rate
among others. Upon this premise they hypothized that “the more concentrated the banking sector. The more
power that banks can exercise and the less likely it will be that corporate debt market will grow or better put “a
highly concentrated banking sector could more effectively protect itself from disintermediation caused by bond
market development”(Dicke and Fan 2005). Using multiple regression analysis in their study, they discovered
that bank concentration is significantly negatively correlated with bond market development, adding that “the
power of banks to resist disintermediation is related to their market power” (Dicke and Fan 2005). This means
that the more concentrated the banking sector, the more negative association it has with bond market
development. Dickie and Fan (2005) maintain that outstanding corporate debt securities as ratio of GDP have a
close relationship with “a number of opportunistic elements”, and other variables such as the volume of merger
and acquisition as a percentage of GDP had positive signs as expected in their apriror institutional variables such
of accounting standards, creditor right and judicial efficiency as used in their regression were also found to be a
contributory factor to the weak corporate governance discovered in the countries of studies. Remarkably, they
concluded that corporate debt market can only develop in an environment where the natural resistance of bank
can be overcome. They recommended prospective economic policies to aid pressures to develop debt market in
order to reduce capital cost and its associated risk.
In United Kingdom, Choudhry (2009) studied the United Kingdom Bond market on the topic tilted- “the
value of introducing structural reform to improve bond market liquidity: experience from the UK gilt market”.
The study covered the time of 1993 to 2002, so as to capture the period in which United Kingdom Monetary
Authorities introduced various structural reforms on the gilt market, purposely for improving the UK
government bond liquidity. The crux of the study was to empirically ascertain the impact the reforms by
examining the liquidity levels within the post-reform period of the market. Multiple regression technique was
adopted in his methodology to estimate the values of observed price error (OPE) as the dependent variable. The
study was motivated on getting the determinants of the proxy measure of market liquidity (such as bonds age,
the bid-offer spread and the amount of bonds outstanding) and largest contributor of the various explanatory
variables in influencing liquidity levels of the gilt market. As such, issue size, bond maturity, overall market
confidence, bond minimum on discount and swap spread were used as independent variables of the study. In all
these variables, a cross sectional time series data was utilized. These data grouped into three periods
(comprising period 1 to period 3) for the purpose of connivance in testing the variables under study. In his
analysis, it was found that bond size of the UK gilt market has negative significant relationship with the
observed price error. This means that a large issue size of bond in the gilt market suggest greater liquidity but
with smaller spread. As a matter of fact, issue size in the bond market does not greatly influence bond liquidity.
Then for terms of maturity, it was discovered that it is positively significant at 5% level; which means that
higher term maternity bonds tends to increase interest rate risk with wider spread. On the other hands, market
confidence was observed to be negatively significant statistically with bond market liquidity. It is reported that
market confidence is not practically significant because it has very unnoticeable impact on the observed price
error. Though this practical implication appears strange but it is believed that the transparency and efficiency in
a developed bond market like UK gilt market should have a market yields that reflect true fair value instead of
market sentiments. The premium and discount price variables were reported to have no certain sign from the
result. This finding is in tedium with that of Daiz and Skinner (2001) as cited in Choudhry (2009). Then swap
variable was found with the expected sign (positively significant). The Chow test conducted because of common
nature of structural changes in financial market proved valid. In the final analysis according to the interpretation
of his statistical values, it was concluded that an increase in market liquidity would not all the time bring about
reduction in observed price error, especially in an illiquid trading economic conditions. He also further
concluded that market liquidity can be maintained via the application of most trading conditions such as market
volatility, bench mark bond issuance, swap spread among other factors. Therefore, introducing structural
reforms as a helping hand to increase and sustain liquidity in bank market were recommended to foreign debt
agencies.
Other studies also reviewed include: Kahn (2005), worked on original sin and bond market development in
Sub-Saharan Africa, Xiong and Yan2010) who studied the heterogeneous expectation and bond markets,
Seok(2012), who investigated the determinants for Asian bond market development, Dickie and Fan (2005)
who worked on bank and corporate debt market development, Loncarski, Horst and Veld(2006), investigated
5. Macroeconomic Determinants of Bond Market Development: Evidence from Nigerian
www.ijbmi.org 92 | Page
why companies issue convertible bonds, Becker and Ivashina (2013) who justified reaching for the bond
market, Ogilo(2014) who studied the effect of selected macro-economic variable on bond market development
in Kenya, Onaolapo and Adebayo(2010), who investigated the effective development of the bond market and
the Nigeria economy, Hakansson (1999) who studied the role of corporate bond market in an economy-and in
avoiding crises, among others. The identified gap in the reviewed literature is that none of these studies has
primary focus on Nigerian bond market.
III. THEORETICAL FRAMEWORK
This study is anchored on the Information Asymmetry theory. Theoretical evidences have shown that
information asymmetry usually associates with agency theory and pecking order theory. Meanwhile, the theory
of information asymmetry was propounded by George Akerlof, Micheal Spence and Joseph Stiglitz in 1970; and
in 2001, three of them were awarded a noble price in Economics for their concerted research analysis of market
with information asymmetry. Basically, the gamut of information asymmetry postulates a situation where one
party in business transaction has more and superior information than another (David and Braruch, 2000). The
theory presents two groups in an ideal market-the informed group (which comprises the managers of the firms
who have full knowledge about the firms‟ prospects) and the uninformed group (the investors in the firm who
do not have superior information about the firm). Like the problem with agency theory (the problem of
conflicting interest between management and investors); information asymmetry also breeds the problem of
moral hazard, adverse selection, information monopoly discriminatory action and reserve prices (Black, 1998;
David and Baruch, 2000).
Thus, the idea behind adopting information asymmetry as part of the theoretical foundation for this study
is on the premise that substantial proportion of the transactions in bond market and investment decision making
are based on transmission of firms accounting and financial information from those who have it to those who
need it. These accounting and financial information are structured on information asymmetry. Therefore, these
two theories (efficient market theory and the information asymmetry theory) form the two strong pillars upon
which the study stands.
IV. METHODOLOGY
3.1Research Design and Data
Based on the nature of the variables of the study (variables that are completely out of the control of the
researcher) this study adopts ex post facto (ie after the fact) research design. The choice of this design is
according to the belief of Agha (2011) that ex post facto is most suitable in a study characterized by observation
of events or influences on a phenomenon that have already taken place. As a quantitative research, the study as
well made use of descriptive research approach for the purpose of explaining the data collected.
3.2 Sources of Data Collection
The nature of data used in this study is times series data. Meanwhile, all these data were basically sourced from
Nigerian Stock Exchange Fact-book of various years, Nigerian Stock Exchange Annual Report and Statement of
Account, CBN Statistical Bulletin and Nigeria Bureau of Statistics. Some data were also sourced from ICE data
of stock market development of World Bank, Banks and International Financial Statistics of IMF among others.
The scope of study is focused on Nigerian bond market as the case in point. The study is also cover both
government bonds and corporate bonds in Nigeria within the period of 1981-2012. The reason for limiting the
scope of the study to both government bonds and corporate (and within 1981-2012) is because of availability
and accessibility of data in one hand and the other hand, it is also to capture the overall Nigerian bond market in
terms of size and depth on economic wide bases.
V. Description of Research Variables
The variables of the study is generally be grouped into dependent and independent variables. In one hand, bond
market development forms the dependent variable of the study. It is measured by aggregate bond market
capitalization (BdCap) as a percentage of GDP. The reason behind using aggregate bond market capitalization (ie
both government bond and corporate bond) as measure of bond market development in this study is because; it
captures the overall market size/depth of Nigerian bond market on economy wide bases. This reason is also
supported by Levine and Zervos (1998). On the other hand, the independent variables of the study include the
macroeconomic variables. The independent variables are operationally defined in this study as follows:
VI. Model Specification
It implies that the development of bond market in Nigeria is dependent on macroeconomic factors. Thus, this
statement can explicitly be expressed in a functional relation as: bond market development is a function of
macroeconomic variables. Since the focus of this study is to investigate the determinants of bond market
development in Nigeria by examining the contribution of each of these variables, the regression equation is thus
specified as:
6. Macroeconomic Determinants of Bond Market Development: Evidence from Nigerian
www.ijbmi.org 93 | Page
LogBdca/GDPt = logβ0 + β1logIntt + β2logBkst + β3logfdit + β4logFblat
+β5logExgrt + β6logInfrt + β7logSavst + β8logByidt + . . . [1]
Where log = logarithm
Bdca = Bond Market capilalization
GDP = Gross Domesit Product
Int = interest rate variability
Bks = Banking sector development
Fdi= Foreign direct investments
Fbla = Fiscal balances
Savs = Savings
Infr = Inflation rate
Byid = Bond yield
= Error term
The purpose of adopting an exponential (non-linear) regression model is to keep away from additive simple
linear regression model. Meanwhile, naturally, one would theoretically estimate a simple linear relationship
using simple linear regression model; but some natural phenomena often assume linearity. This is similar to the
relationships under study. Since the relationship between the respective dependent variable may not be linear;
then exponential (non-linear) regression equation, becomes a better model that will capture or predict a closer
realistic relationship. Again, econometrically, simple regressions often do not provide adequate prediction of the
dependent variable due to the case of internal validity or superiority. Theoretically, there must be more than one
independent variable that explains the variability in the dependent. This logic helps to obtain better prediction on
the dependent variable by regressing the dependent variable on more than one independent variable.
VII. RESULTS AND ANALYSIS
4.1 Diagnostic Results
The results of diagnostic tests conducted to validate empirical results and the data employed in the study and for the
purpose of accomplishing the basic assumptions of OLS are summarized below:
(a) Unit Root Test:The unit root test was conducted using ADF statistics on both the independent and the dependent
variables. The result shows that all the variables were stationary at first difference with zero lag.
(b) Result on Autocorrelation test: The autocorrelation assumption test was performed using Durbin Walton test. The
purpose is to confirm the likelihood of autocorrelation in the model and to accomplish the assumption of independent
error which arises if the disturbance term grows to influence the dependent variables. The conventional rule is that the
closer the value of d to 2 the less likelihood of the problem of autocorrelation. Results indicate that d value is 1.5. The
values are actually within the acceptable range of near 2. Therefore, the autocorrelation assumption is accomplished.
(c) Result on Normality Test : Among other techniques of checking for normality assumptions, Jarque-Bera technique
was adopted. The reason is because it is for asymptotic test dedicated to OLS and it captures both skewness and kurtosis.
Consistent with the instructive rule of JB statistics, the results of the normality test shows that the residual is not
normally distributed regarding the values of skewness or kurtosis. But we did not worry much about this problem
because Tabachick and Fidell(1989) suggest that the problem of the skewness or kurtosis does not significantly change
the regression results. See fig. 1 bellow.
7. Macroeconomic Determinants of Bond Market Development: Evidence from Nigerian
www.ijbmi.org 94 | Page
0
1
2
3
4
5
6
-1.25 -1.00 -0.75 -0.50 -0.25 0.00 0.25 0.50 0.75 1.00
Series: Residuals
Sample 1982 2013
Observations 32
Mean 1.78e-15
Median 0.037073
Maximum 0.868912
Minimum -1.229773
Std. Dev. 0.627403
Skewness -0.386910
Kurtosis 2.224669
Jarque-Bera 1.599913
Probability 0.449349
Fig. 1: Normality Test Result
(d) Result on Multicollinearity Test: To accomplish Multicollinearity assumption, the variance inflation factor (VIF) test
was conducted. VIF test is one of the most conventional tests that are reliable in measuring the level of multicollearity.
Conventional approach to VIF is that the value of VIF should not exceed ten, as suggested by Guiarati (2003), Hair and
Goodman (2008). Our result of VIF showed value less than ten.
(e) Result on Heteroscedasticity Test: Again, Heteroscedasticity occurrence was checked in the model estimation. This
was done using Breusch-Pagan-Godfrey method. The essence of testing for Heteroscedasticity is to detect if there is an
association between the independent variables and residuals value in the model and to ensure no violation of the constant
variance assumption that perhaps leads to the predicament of Heteroscedasticity. Generally, this OLS assumption is
accomplished when the OLS coefficient estimates are best linear unbiased (i.e BLUE OLS) (Iyoha, 1996). From the
heteroscedasticity Test, the results indicate that the cal.obs R square is 9.034732; indicating that the error terms has a
constant variance.
VIII. EMPIRICAL RESULTS
Table 1: Regression Results
Variable Coefficient Std. Error t-Statistic Prob.
C -8.339318 1.141375 -7.306380 0.0000
D(FDI) 0.082648 0.067549 1.223528 0.2335
FBLA 2.829209 1.205473 2.346969 0.0279
LOG(SAVS) 1.846621 0.608361 3.035402 0.0059
BYID 0.111099 0.045076 2.464721 0.0216
INFR 0.000351 0.009222 -0.038028 0.0029
BKS -0.040658 0.044570 -3.912229 0.0275
EXGR 0.006295 0.004622 -2.361784 0.0018
INT -0.167108 0.038732 -4.314532 0.0003
R-Squared = 0.833567, Adjusted R-Squared = 0.775677, F-statistic =4.39920,
Prob(F-statistic) = 0.000000, DW stat = 1.961744, S. E of regression =0.728389.
Source: EViews Stat.
The empirical results as presented in table 1 aptly show that interest rate, exchange rate, banking sector development and
inflation rate have significant influence on bond market development in Nigeria. The results indicate that the relationship
between interest rate, exchange rate, banking sector development and inflation rate as macroeconomic factors are
negative and very significant. This means that these macroeconomic factors are major determinants of bond market
development in Nigeria. It also suggest that an increase inflation, exchange rate, interest rate and the amount of credit
provided by the banking sector, within the Nigerian economy, brings about decrease in the aggregate bond market
capitalization in the Nigerian bond market if all other factors are held constant. From the results, it is interpreted that high
inflation rate and the unstable interest rate inherent in Nigeria economy can scare potential investors in the Nigerian bond
market-as this is in agreement with the Keynesian theoretical standpoint that high inflation rate and interest rate
negatively affect investment. In concrete terms, no doubt, high inflation and interest rate discourages investment in bond
securities because both individual investors and firms found it extremely unattractive to invest in a business environment
characterized with such circumstances. As a matter of fact, it will also be difficult for bond market to develop.
8. Macroeconomic Determinants of Bond Market Development: Evidence from Nigerian
www.ijbmi.org 95 | Page
Again, for banking sector development and bond market development, it is discovered that banking sector
development has no positive significant impact on bond market development in Nigeria. The implication of this finding
is that a unit increase in the amount of total credit provided by the Nigeria banks to private sector brings about reduction
in the level of bond market capitalization in Nigeria. The result is also consistent with the theoretical position about
banking sector development or banking system size and bond market development. For example, it is debated in the
theoretical literature that where bond market is not living up to the expectation of the potential funds users, bank plays
both role of banking institutions and the role of bond market in terms of funds provisions to the needy investors. Again, it
is argued in the literature that bond markets suffer a lot in any economy that is bank dominated instead of market
dominated. As much as can be established, Nigerian economy is bank dominated, and as such, Nigerian banks, have
allegedly taken up the role of bond market in term of funds provision. No wonder, Greenspan (2000) claims that Nigerian
bond market act like a spare tyre in the provision of corporate funds. The Nigerian banks recapitalization of 2005 and the
banks consolidation policy of 2010 no doubt repositioned Nigerian banks to be more concentrated. The concentration
makes the banks to arrange strategic loan packages which attract the public not to seek for funds from the bond market
(Benstan, 1994; Rejan and zingales, 2003; Sehinasi and Smith, 1998). On the other hand, the result is also consistent with
the empirical findings of Eichengreen and Luengnamemtchai (2006), Adelegan and Radzewiz- Back (2009), Choudhry
(2009), Fink et al, (2003), Dicke and Fan (2005), among others.
Furthemore, other macroeconomic factors such as foreign direct investment and savings proved to have positive
significant impact on bond market development in Nigeria. Thus, an increase foreign direct investment and increase in
general awareness about savings in Nigeria will lead to increase in investment in the bond market. Any increase in the
bond market investment would increase the volume of bond market capitalization as more bonds will be issued; as such,
the market would expand (leading to greater development). Therefore FDI and savings are strong determinants of bond
market development in Nigeria.
Against researcher‟s expectation, fiscal balance and bond yield show a positive but insignificant relationship.
Therefore the study does not find fiscal balance and bond yield as determinants of bond market development in Nigeria.
It should be re-emphasized here that fiscal balance and bond yield were added in the research variables as controlled
variables not as direct macroeconomic variables. Reason not farfetched; budget balance (either deficit or surplus) play a
vital role in determining the level of government debt. Bond yield on the other hand plays the same role on bond
securities investment. Thus it was expected that their behaviours could have influence on bond market development.
Essentially, other indicators in the estimation such as R2
adjusted value, show 77% (i.e above 70%) - meaning that 77%
fluctuations in Nigerian bond market is explained by the regression model. The Durbin-Waston statistics is also close to
2, therefore the overall result is not by chance.
IX. CONCLUSION
It is concluded in this present study that interest, rate, exchange rate, inflation rate, banking sector development
and savings are among the macroeconomic factors that spur bond market development in Nigeria. The policy
implication of these findings is that macroeconomic factors in Nigeria act as catalyst for Nigerian bond market
development. The study recommends further research on the institutional determinants of bond market
development with attention to country‟s specific characteristics.
REFERENCES
[1]. Ahrens, P.(2002). Predicting Recession with Interest Rate Spreads: A Multi-country Regime-Switching Analysis, Journal of
International Money and Finance, 2(1), 519-537.
[2]. Alajekwu, U. B.and Achugbu, A.A.(2012). The Role of Stock Market Development on Economic Growth in Nigeria: A Time
Series Analysis, An International Multidisciplinary Journal, Ethopia, 6 (1), 51-70.
[3]. Aigheyisi, O.S. and Edore, J.O. (2014). Do government expenditure and Debt affect stock market Development in Nigeria? An
empirical Investigation, Research Journal of Finance and Accounting, 5 (2a) available online at www.iiste.org.
[4]. Becker, B. and Ivashina B.T.(2013). Reaching for the Bond Market, IMF Working paper 12-103.
[5]. Cesaratto, S. (1999). Savings and Economic Growth in Neoclassical theory, Cambridge Journal of Economics, 2(3),771-793.
[6]. Choudhry, M.(2009). The Value of Introducing Structural Reform to Improve Bond Market Liquidity: Eperience from the UK
Gilt Market, European Journal of Finance and banking research, 2(2),12-35.
[7]. Churchill, R.Q. and Agbodoha, G.(2013). Stock Market Capitalization and Economic Growth in Ghana, Research Journal of
Finance and Accounting, (17), 154-164.
[8]. Christensen, J. (2004). Domestic Debt Markets in subs-Saharan Africa, IMF Working Paper No wp04/46.
[9]. Colombage,S. R. N. (2009). Financial Markets and Economic Performances: Empirical Evidence from Industrialized, Economics
Research in International Business and Finance, 23, 339-348.
[10]. Davis, E.P. (2001). Multiple Avenues of Intermediation, Corporate Finance and Financial Stability, IMF Working paper 01/115.
[11]. Demirguc-Kunt A. and Lwine. R. (1996). Stock Market Development and Financial Intermediaries: Stylized Facts, The World
Bank Economic Review, 10 (2),223-444.
[12]. Daferighe, E.E. Charlie, S.S. (2013). The Impact of Inflation on Stock Market Performance in Nigeria, American Journal of
Social and Management Sciences, 3 (2), 76-82.
[13]. David, A. and Braruch, L. (2000). Information Asymmetary, R&D and Insider Gains, Journal of Finance, 55 (6), 2747-2766.
[14]. Dickie, P. and Fan E. X. (2005). Bank and Corporate Debt Market Development, VMS Working Paper Series 1 (1) 1-23.
[15]. Ebner, A. (2009). An Empirical Analysis on the Determinants of CEE Government Bond Spreads, Emerging Markets Review,
10, 97-121.
9. Macroeconomic Determinants of Bond Market Development: Evidence from Nigerian
www.ijbmi.org 96 | Page
[16]. Eichengreen, B. and Luengnamemitchai, P. (2004). Why doesn‟t Asia Have Bigger Bond Markets, IMF Working Paper series,
10576.
[17]. Eichengreen, B and Luengnamemitchai, P. (2006). Bond Market as Condicts for Capital Flows: How does Asia Compare? IMP
Working Paper No. WP/06/238.
[18]. Ezeoha, A. Ogamba, E. and Onyike, N.O. (2009). Stock market Development and Private Investment Growth in Nigeria, Journal
of Sustainable Development in Africa, 11 (2), 20-35.
[19]. Ezeoha, A.E. (2011). Banking Consolidation, Credit Crisis and Asset Quality in a Fragile Banking System, Some Evidence from
Nigeria Data, Journal of Financial Regulation and Compliance 19 (1), 34-35.
[20]. Fink, G. Haiss, P. and Hristoforova, S. (2003). Bond Market and Economic Growth, IEP Working Paper No. 49, University of
Economic and Business Administration, Vienna.
[21]. Garcia V.F. and Liu, L. (1999). Macroeconomic Determinant of Stock Market Development, Journal of Applied Economics, II
(1), 29-59.
[22]. Greenspan, A. (2000). Global Challenges; Remarks at the Financial Crisis Conference, Council on Foreign Relations, New York,
July 12.
[23]. Giesecke, K., Longstaff, F.A. Schaefer, S. and Strebulaev, I. (2011). Corporate Bond Default Risk: A 150 Year Perspective,
Journal of financial Economics 102, 233-250.
[24]. Hakansson, H. (1999). The Role of Corporate Bond Market in an Economy-and in Avoiding Crises, Journal of Management and
Society, 1 (2), 38-43 available online from www.lautectitransportmgt.com.journal.html
[25]. Han, A. (2010). Efficient Market Hypothesis (EMH), Retrieved online on 6th
Feb. 2014 from http://www.alvinhan. Com/E-M-
H.htm.
[26]. Hamada, K., Jeon, S.C. and Ryou, J.W. (2004). Asian Bonds Market: Issues, Prospects and Tasks for Cooperation, a Paper
presented at the Korea and the word Economy III Conference, Sungkyunkwan University, Seoul, July 3-4.
[27]. Hawkins, J. (2002). Bond Markets and Banks in Emerging Economics, BIS Paper No. 14.
[28]. Hair and Goodman, (2008). The Internet and Corporate Reporting in Europe, Europan Account and Finance Review, 8 (2),
289- 301.
[29]. Indika, K. Abbas, V. and Martins, O. (2010), An Empirical Analysis of International Stock Market Volatility, Transmission,
Retrieved online on 20 Feb. 2014 from www.now.edu.all/commerce/ecomepapers.html.
[30]. Iyoha, M.A. (1996). Applied Econometrics, Revised Edition, ABC, Lagos Publishers Ltd. P 677.
[31]. Janzi, V. (2004). Fiscal Policy: When theory coincide with Reality; A Paper Presented at the Congress of the International
Institute of Public Finance, Bocconi, Universty Milan, 25th
August.
[32]. Jhingan, M . L. (2003). The Economics of Development and planning, 36th
Revised Edition, Delhi, Verinda Publications, Ltd.
[33]. Development and Economic growth in Africa: Case study of South Africa, Mediterranean Journal of Social Sciences 5 (3),554-
568.
[34]. Kahn. B. (2005). Original Sin and Bond Market Development in Sub-Saharan Africa, African in WORLD Economy- the
National, Regional and International Challenges, available at www.fondad.org
[35]. Loncarski, I. Horst. J and Veld, C. (2006). Why do Companies Issue Convertible Bonds? A Review of Theory and Empirical
Evidence, Advance in Corporate Finance and Asset Pricing, Retrieved online 4th
Jan.2015, from
www.elsevieramsterderm.renneboog.com
[36]. Levine, R. and Zarvos. S. (1996). Stock Market Development and Long-Run Growth. World Bank Economic Review, 10 (2),
323-340.
[37]. Levine, L.(1998). Are Assets fungible? Testing the Behavioral Theory of Life-Cycle Savings; Journal of Economic Behavior and
organization 36(1998), 59-83.
[38]. Mu, P. Phelps, P. Stotsky, J.G. (2013). Bond Markets in Africa, IMF working paper, No wp/13/12.
[39]. Mankiw, N.G. (2000). The Savers- Spenders Theory of Fiscal Policy, NBER working paper series 7571, Retrieved on 4th
Dec,
20114 online from http://www.nber.org/papers/w/7571
[40]. Mishkin, F.S. and Easkins, S.G. (2012). Financial Markets Institutions, 6th
Edition, Delhi, Pearson Internaitonal Publishers.
[41]. Milaljek, D. Scaligna, M. and Villar, M. (2002). Recent Trends in Bond market, Available online from
http://www.investopedia.com/artices/04105/904.asp
[42]. Meckinnon, R. (1973). Money and Capital Market in Economic Development, Washington D.C, the Bookings Institution cited
in Fink et al, (2003).
[43]. Modiglianni, F. and Miller, M. (1958). The Cost of Capital, Corporation Finance and the Theory of Investment, citied in Fink et
al, (2003).
[44]. Ogilo, F. (2014). The Effecy of Selected Macro-economic Variable on Bond Market Development in Kenya, DBA African
Management Review, 4 (2),54-62,
[45]. Onaolapo, A. A. and Adebayo, E. O. (2010). Effective Development of the bond Marjet and the Nigeria Economy, Journal of
Management and Society, 1 (2), 38-43, available online from www.lautectitransportmgt.com.journal.html
[46]. Osinubi, T.S. and Amaghionyeodiwe, L.A. (2003). Stock Market Development and Long-run Growth in Nigeria, Journal of
African Business 4 (3), 79-134.
[47]. Onwukwe, N.U.(2011). Fundamentals of Macroeconomics, 3rd
dition, Enugu: Econas Ccom.Ltd, 141P.
[48]. Parker, J.(2010). Theory of Consumptions and Savings, Retrieved online on 20th
Dec,2014 from
www.lautectitransportmgt.com.journal.html
[49]. Rahman, A.A., Sidek N.Z and Tafri, F.H. (2009). Macroeconomic Determinants of Malaysian Stock Market, African Journal of
Business Management, 3 (3), 95-106.
[50]. SEC, (2010). Nigerian Capital Market Bulletin, 2.
[51]. Sigh, A. (1997). Stock Market, Financial Liberalization and Economic Development, Economic Journal, 107.
[52]. Shahbaz, M. Ahmed, N. and Ali, L. (2008). Stock Market Development and Economic Growth; Ardl Causality in Pakistan,
International Research Journal of Finance and Economics, issue 14, 183-194.
[53]. Singh, T. (2008). Financial Development and Economic Growth Nexus: Time series Evidence Form India, Applied Economics.
40, 99 135
[54]. Soek, B. I. (2012). Determinant for Asian Bond Market Development (1), Korea Capital Market Institute (3), 1-13.
[55]. Shaw, E.S.(1973).Financial Deepening in Economic Development, New York, Oxford University Press, cited in Fink et al,
(2003).
[56]. Shahbaz, M. Ahmed, N. and Ali, L. (2008). Stock Market Development and Economic Growth; Ardl Causality in Pakistan,
International Research Journal of Finance and Economics, issue 14, 183-194.
10. Macroeconomic Determinants of Bond Market Development: Evidence from Nigerian
www.ijbmi.org 97 | Page
[57]. Tabarcluick , D. V and Fidell, G. (1989).Hedge Disclosureas, Futures Prices and Production Distortions, Journal of
Acccounting Research, 38.
[58]. Wiredu, S. Suleman and Adjarty, B. (2013), Determinants of Stock Prices in Ghana, Current Research Journal of Economic
Theory ,5 (4), 66-70.
[59]. World Bank and IMF (2001). Developing Government Bond Hand Book, Washington DC.