Open Access Article SciPap-1016
Financial Market Inclusion, Shadow Economy and Economic Growth Paradigm: A Less Developed Country Perspective
by Bernhard Ishioro 1,*

1 Department of Economics, Faculty of the Social Sciences, Delta State University, P.M.B. 1, Abraka, Delta State , Nigeria

* Authors to whom correspondence should be addressed.

Abstract: This study used annual time series data in the examination of the relationship among shadow economy, financial market inclusion and economic growth in Nigeria both in the short and long-run periods for our econometric analysis. The time series data covered the period 1990 to 2017. The simple Ordinary Least Squares (OLS) regression and the Error Correction Mechanism (ECM) complemented with the unit root and cointegration tests were applied. The OLS results indicated that the shadow economy facilitates the growth performance of financial market inclusion process in Nigeria. However, the short-run results show that only the one past lagged value of the shadow market statistically explains the financial market inclusion development in Nigeria. The study recommends that short-run financial market inclusion policies should be avoided to prevent the adverse effects of the shadow economy on the inclusive finance development process.

Keywords: Economic Growth, Nigeria, Financial Market Inclusion, Financial Services, Shadow Economy

JEL classification:   F43 - Economic Growth of Open Economies,   G20 - General,   G21 - Banks • Depository Institutions • Micro Finance Institutions • Mortgages

SciPap 2020, 28(1), 1016

Received: 13 December 2019 / Accepted: 29 April 2020 / Published: 30 April 2020