Effect of Bank Diversification on Economic Growth in Nigeria

Obisesan Ola Grace, Ogunsanwo Odunayo Femi

Abstract


The study investigated the effect of bank diversification on economic growth in Nigeria. Ten (10) commercial banks were randomly sampled for the study data used were sourced from the annual reports of the selected commercial banks spanning from 2013-2016. The study gathered data on real gross domestic product, diversification of income, diversification of loan and diversification of deposits. The study employed Panel data estimations including pooled OLS, fixed effect, and random effect estimations approach to test the relationship existing between the exogenous and endogenous variables in the study. The result of the finding explored that diversification measured in terms of diversification of income, diversification of loan and diversification of dividends has positive impact on economic growth in the study as measured in terms of Gross Domestic Product, meaning diversification has the capacity to boost the level of performance of the economy. Based on this, the study recommended that there should be sustainability of government policies in order to stimulate the much desired growth in the nation’s economy. 


Keywords


Diversification; Commercial Banks; Economic Growth; Nigeria

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DOI: http://dx.doi.org/10.3968/10632

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