The Impact Of Capital Flows On Financial System Stability In Nigeria
Publication Date: 30/08/2018
Author(s): Harley Tega Williams, Akinola Abisola Titilayo.
Volume/Issue: Volume 1 , Issue 1 (2018)
Abstract:
The impact of capital flows on the financial system stability of the Nigeria economy was carried out using data from 1987 to 2017. This study attempted to find out the casual relationship between financial system stability variables and capital flows in Nigeria. The impact of financial stability on capital flows prompted the researchers to undertake this study so as to establish a linear relationship between foreign direct investment and other financial stability variables. The theoretical framework of risk was applied and the model specification variables and methodology applied in this study may have been overlooked by previous studies in Nigeria. The study found out that credit to private sector negatively affect foreign direct investment. The coefficient of determination in the study was high indicating that the explanatory variables (financial system stability variables) are captured by the capital flows variable (FDI). The study therefore recommends that the Nigeria government should adjust the model for credit to private sector so as to have a positive relationship with capital flows.
