Economics

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    “They Withdrew All I Was Worth”: Automated Teller Machine Fraud and Victims’ Life Chances in Nigeria
    (Sage Publication, 2017) Tade, O.; Adeniyi, O. A.
    A major downside of the cashless policy introduced by the Central Bank of Nigeria in 2014 is pervasive automated teller machine (ATM) frauds. While fraudsters gain, the life chances of victims are affected. Previous studies in Nigeria had not investigated the effect of ATM frauds on victims’ life chances. Data were generated through in-depth interviews with victims of ATM fraud. Findings show victims suffered post fraud trauma and often depended on friends, parents and relatives to survive the trauma. The reaction of banks to customers’ victimization was unfavorable and unhelpful in compensating the financial losses of customers. We recommend better internal controls for banks and implementation of mechanisms to govern trust and protect customers from victimization.
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    Financial Liberalisation and Small Medium Scale Enterprises Growth in Nigeria
    (West African Monetary Institute (WAMI), 2016) Usuah, E.; Odozi, J.; Adeniyi., O. A.
    This paper examined the relationship between financial liberalization and the growth of Small and Medium Scale Enterprises (SMEs) in Nigeria controlling for some other key macroeconomic variables such as investment, inflation and the domestic national output (GDP). Using annual data covering the period 1981-2012, we estimated the effect of the macroeconomic variables on the growth of SMEs. An index which measured the gradual progression and institutional changes involved in financial liberalization was constructed for this study. A number of interesting results were obtained. First, unlike previous studies which concluded that financial liberalization leads to a reduction in financing constraint of SMEs thereby leading to their growth; our results showed that financial liberalization had negative though non-significant effect on the growth of SMEs in Nigeria. Second, the results also showed that inflation had a positive and significant effect on the growth of SMEs in Nigeria. Investment had a positive though non-significant effect on the growth of SMEs in Nigeria. Finally, GDP had a large negative but significant effect on the growth of SMEs. On the basis of the result obtained from the study, government policies towards further liberalization of the financial sector of the country might not lead to an increase in the growth of SMEs given the existence of a negative relationship between SMEs growth and financial liberalization.
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    Financial System Development and Economic Growth in Sub-Saharan Africa
    (West African Institue of Financial Economic Managemnt, 2016) Egwaikhide, F. O.; Oyinlola, M. A.; Omisakin, O.; Adeniyi, O. A.
    This paper contributes to the age-old debate on the link between financial development and economic growth by examining the role of monetary policy. There is a possibility that monetary policy enhances financial system performance with attendant impact on growth. To unveil this influence, this paper employs fixed effects and System GMM on data from 28 sub-Saharan African countries over the period 1996 to 2014. Results from the baseline estimation using fixed effects indicate that financial development indicators are negatively and significantly associated with growth for two of the three measures used (LGDP and PGDP), while money growth is positively related albeit insignificantly. The results largely remain the same on interaction with money growth. The coefficients of the interactive terms though largely negative are, however, not significant. The results from System GMM presents a different outcome. First, all measures of financial development turn out positive (except BBD) and insignificant. Financial development equally turns negative but insignificant after interacting with money growth. Overall, monetary policy measures, together with their interactions with financial development indicators, show up as weak growth predictors if not dampening, suggestive of the plausible independence of the nexus on the actions of monetary authorities in these countries.
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    Financial System Development and Economic Growth in Sub-Saharan Africa
    (West African Institue of Financial Economic Managemnt, 2016) Egwaikhide, F. O.; Oyinlola, M. A.; Omisakin, O.; Adeniyi, O. A
    This paper contributes to the age-old debate on the link between financial development and economic growth by examining the role of monetary policy. There is a possibility that monetary policy enhances financial system performance with attendant impact on growth. To unveil this influence, this paper employs fixed effects and System GMM on data from 28 sub-Saharan African countries over the period 1996 to 2014. Results from the baseline estimation using fixed effects indicate that financial development indicators are negatively and significantly associated with growth for two of the three measures used (LGDP and PGDP), while money growth is positively related albeit insignificantly. The results largely remain the same on interaction with money growth. The coefficients of the interactive terms though largely negative are, however, not significant. The results from System GMM presents a different outcome. First, all measures of financial development turn out positive (except BBD) and insignificant. Financial development equally turns negative but insignificant after interacting with money growth. Overall, monetary policy measures, together with their interactions with financial development indicators, show up as weak growth predictors if not dampening, suggestive of the plausible independence of the nexus on the actions of monetary authorities in these countries.
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    On the Limits of Trust: Characterising Automated Teller Machine Fraudsters in Southwest Nigeria
    (Emerald Publishing Limited, 2016) Tade, O.; Adeniyi, O. A.
    Purpose – This paper aims to investigate automated teller machine (ATM) fraud in southwest Nigeria, as extant studies have not examined the unintended consequences of ATM subscription particularly the effect of the identity of fraudsters and the strategies for defrauding. Design/methodology/approach – Using sequential exploratory strand of mixed method, data were collected from both ATM users and victims of ATM fraud using multi-stage sampling procedure. This involved purposive selection of Lagos and Oyo states. Findings – Results showed that fraudsters were typically lovers, friends, relatives and sometimes children of victims. Strategies for defrauding included card cloning, swapping of cards and physical attacks at ATM galleries. Research limitations/implications – Because of the size of the sample which is small, the research results may lack generalizability. More expansive works are needed across Nigeria in this regard. Practical implications – The paper includes implications for policy initiative concerning the deployment and use of payment systems such as ATM in Nigeria. Social implications – The paper reveals the limits of trust in cashless policy. It raises salient policy issues concerning the need for the governance of trust to engender adoption. Originality/value – The paper characterizes fraudsters and their strategies for defrauding.
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    The Role of Institutions in Output Growth Volatility- Financial Development Nexus: A Worldwide Study
    (Emerald Publishing Limited, 2016) Raheem, I. D.; Ajide, K.; Adeniyi, O. A.
    Purpose – The purpose of this paper is to investigate the role of institutions in the financial development-output growth volatility nexus. It provides new channels through which financial development can dampen the output growth volatilities of the countries under investigation. Design/methodology/approach – A comprehensive data set for 71 countries covering the period from 1996 to 2012 and the System GMM approach were used. The choice of the methodology is to deal with endogeneity issues such as measurement errors, reverse causality among other issues. Findings – A number of findings were emanated from the empirical analysis. First, the estimates provided evidence of the volatility-reducing effect of financial development. Second, institutions do not have the same reducing influence on output growth volatility. Third, the interaction of financial development and institutions showed that the output volatility reduction arising from financial development is enhanced in the presence of improved institutions. Research limitations/implications – The policy implications derived from this study are in twofolds: first, it is important for policymakers to formulate policies that would ensure and enhance the development of the financial sectors, since its importance in minimizing output volatility has been established. Second, institutional quality should be developed so as to further enhance the growth volatility-reducing influence of financial development. Particularly, institutions should be improved along the multiple dimensions captured in the analysis. Originality/value – To the best knowledge, the novelty of this study to the literature is the introduction of institutions, which is hypothesized to increase the dampening effects of financial development in output growth volatility.
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    Is There A Role for Governance in the Saving-Investment Nexus for Sub-Saharan Africa?
    (Springer Science+Business Media, 2015) Raheem, I. D.; Ajide, K.; Adeniyi, O. A.
    The study broke some yet to be explored ground in the literature on the Feldstein-Horioka (FH) puzzle. Precisely, it uncovered the role of institutions (particularly governance) in the saving-investment causal nexus using data on a panel of 37 sub-Saharan Africa countries, over the period spanning 1996 through 2010. Deploying a battery of panel estimators, the findings further lend support to earlier opinions on the bound of ranges of saving retention coefficients for the region. More specifically, the coefficients are -0.014, 0.200 and 0.21 in the ordinary least squares (OLS), fixed effects (FE) and random effects (RE) regressions, respectively. These estimates are largely synonymous to those reported for SSA in extant studies. Interestingly, considerable improvement was recorded in the saving coefficient from 0.20 to 0.361 when governance was interacted with saving. This concretely reinforces the useful role of governance in mobilizing saving for investment within these economies. Based on these findings, domestic resource mobilisation can be a veritable vehicle for plugging the substantial investment gap in these SSA economies. However, such policy thrust must be necessarily complemented by far-reaching governance reforms.
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    Foreign Capital Flows, Financial Development and Growth in Sub-Saharan Africa
    (Emerald Publishing Limited, 2015) Adeniyi, O. A.; Ajide, B.; Salisu, A.
    This paper investigated how financial development influences the relationship between foreign direct investment (FDI) and economic growth in selected Sub-Saharan Africa (SSA) countries. This study considered three alternative measures of financial development (FD) and their impacts on the FDI-growth linkage. It also explored the possibility of nonlinearities in the tripartite relationships. The results showed a positive influence of FDI on economic growth. Financial system development also had growth-promoting impact in the presence of FDI flows. Interestingly, these findings remained robust when potential endogeneity was accounted for using a well known instrumental variable (IV) estimator. Digging deeper, the findings also supported the existence of non-linearities in the role of FD in the FDI-growth association. In policy terms, these SSA countries will reap more growth benefits from foreign capital flows especially if financial reforms are sustained.
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    Foreign Capital Flows, Financial Development and Growth in Sub-Saharan Africa
    (Emerald Publishing Limited, 2015) Adeniyi, O. A.; Ajide, B.; Salisu, A.
    This paper investigated how financial development influences the relationship between foreign direct investment (FDI) and economic growth in selected Sub-Saharan Africa (SSA) countries. This study considered three alternative measures of financial development (FD) and their impacts on the FDI-growth linkage. It also explored the possibility of nonlinearities in the tripartite relationships. The results showed a positive influence of FDI on economic growth. Financial system development also had growth-promoting impact in the presence of FDI flows. Interestingly, these findings remained robust when potential endogeneity was accounted for using a well known instrumental variable (IV) estimator. Digging deeper, the findings also supported the existence of non-linearities in the role of FD in the FDI-growth association. In policy terms, these SSA countries will reap more growth benefits from foreign capital flows especially if financial reforms are sustained.
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    Output Growth Volatility, Remittances and Institutions
    (Emerald Publishing Limited, 2015) Ajide, K.; Raheem, I. D.; Adeniyi, O. A.
    Purpose – The purpose of this paper is to empirically examine the role of institutions on the remittances– output growth volatility relationship. Design/methodology/approach – The data set of this paper is limited to 71 remittances recipient countries. In an attempt to deal with endogeneity issues, the paper adopts the use of system generalized method of moment (GMM). Findings – First, in consonance with earlier studies, the growth volatility reducing influence of remittances flows was established. Second, unlike the extant literature, the growth volatility reduction potential of remittances was found to be more pronounced in the presence of well-functioning institutions. Finally, the interaction of remittances with our six institutional quality measures showed that growth volatility reduced considerably with better institutions. Practical implications – In terms of policy, remittances recipient countries need to simultaneously pursue economic and governance reforms. Both of these will enhance the counter-cyclicality of remittances and possibly other capital flows. Originality/value – Substantial efforts have been devoted to investigating the impact of remittances on output growth volatility, while very little research attention has been devoted to analysing the impact of institutions on the remittances– output growth volatility nexus.