The Impact of Financial Globalization on Financial Development in Nigeria

Abstract

This study explores the relationship between financial globalization and financial sector development in Nigeria by analyzing annual time series data from 1996 to 2024, employing the Autoregressive Distributed Lag (ARDL) technique. Findings indicate that financial globalization has a negative but statistically insignificant effect on financial development in the short run. In the long run, the impact turns positive; however, it remains statistically insignificant at the 5% threshold. Notably, foreign direct investment (FDI) demonstrates a significant and positive influence on financial development across both short- and long-term horizons. In contrast, foreign portfolio investment (FPI) does not display a meaningful effect.