-
The Impact Of Interest Rate On Domestic Investment
-
-
-
SUMMARY, CONCLUSION AND RECOMMENDATION
5.0 Summary of Findings
The main focus of this research has been to carry out empirically the impact of rate on domestic investment in Nigeria covering the period 1980-2016. In the course of the study, the historical background of interest rate and investment were reviewed. Furthermore, the problems of interest rate fluctuations and its possible effect on investment was evaluated. The chapter two was a compendium of literature was the views and researches of previous authors were reviewed and analyzed. Data used in the research was collected from the Central Bank of Nigeria (CBN) statistical bulletin and the methodology employed to estimate the parameters was the linear regression with the application of Ordinary Least Squares (OLS) technique. The summary of findings from the analysis is reported thus:
1. Interest rate has significant impact on domestic investment in Nigeria
2. Inflation has no significant impact on domestic investment in Nigeria
3. Money supply has no significant impact on domestic investment in Nigeria
5.2 Conclusion
This study has been able to carry out an empirical analysis of the impact of interest rate on domestic investment in Nigeria covering the period 1980-2016. The main finding of the research was that interest rate has a negative relationship with domestic investment in Nigeria and that interest rate has a significant negative impact on domestic investment in Nigeria. With this, it can be concluded that over the years in Nigeria, the cause of low investment in Nigeria is due to high and fluctuating interest rate.
5.3 Recommendation
Findings from the study compelled the following recommendations:
1. The federal government through the apex bank (CBN) should compel the commercial banks to reduce their level of interest rate charged to borrowers/investors. This is expected to increase the level of domestic investment in the economy.
2. The Central Bank of Nigeria (CBN) should use effective monetary policies to stabilize the level of interest rate, inflation and money supply in the economy.
3. The federal government should ensure a conducive and comfortable macroeconomic atmosphere so that domestic investment can prosper well.
4. The commercial banks should ensure that loans borrowed from them for investment purposes are used as claimed.
-
-
-
ABSRACT - [ Total Page(s): 1 ]The relationship between interest rate and domestic investment has attracted the attention of economists and other economic experts. This study carried out an empirical analysis of the impact of interest rate on domestic investment in Nigeria covering the period 1980-2016. Data for the research was extracted from the central bank of Nigeria statistical bulletin. The methodology adopted in the research is the multiple linear regression with the application of Ordinary least Squares (OLS) techniqu ... Continue reading---
APPENDIX A - [ Total Page(s): 2 ]Appendix II Unit Root Tests Null Hypothesis: INVESTMENT has a unit root Exogenous: Constant Lag Length: 1 (Automatic - based on SIC, maxlag=9) ... Continue reading---
TABLE OF CONTENTS - [ Total Page(s): 1 ]Title page Certification page Approval page Dedication Acknowledgement Abstract Table of content CHAPTER ONE: INTRODUCTION 1.1 Background of the Study 1.2 Statement of the Prob ... Continue reading---
CHAPTER ONE - [ Total Page(s): 1 ]INTRODUCTION 1.1 Background of the Study The behaviour of interest rates, to a large extent, determines the investment activities and hence economic growth of a country. Investment depends upon the rate of interest involved in getting funds from the market, while economic growth to a large extent depends on the level investment. According to Jhingan (2003), if the rate is high investment is at low level. A low rate of interest leads to an increase in investment. There is therefore a ... Continue reading---
CHAPTER TWO - [ Total Page(s): 4 ]Obamuyi (2009) investigated the relationship between interest rates and economic growth in Nigeria, using time series analysis and annual data from 1970 - 2006. The co-integration and error correction model were used to capture both the long-run and short-run dynamics of the variables in the model. The empirical results indicate that real lending rates have significant effect on economic growth. There also exists a unique long-run relationship between economic growth and its determinants, includ ... Continue reading---
CHAPTER THREE - [ Total Page(s): 1 ]METHODOLOGY This study makes use of econometric procedure in estimating the impact of interest rate on economic growth in Nigeria. The Ordinary Least Square (OLS) technique is employed in obtaining the numerical estimates of the coefficients in different equations. The OLS method is chosen because it possesses some optimal properties: its computational procedure is fairly simple and it is also an essential component of most other estimation techniques. Secondly, this technique has been adopte ... Continue reading---
CHAPTER FOUR - [ Total Page(s): 1 ]PRESENTATION AND ANALYSIS OF RESULTS 4.1 Unit Root Test In a research involving the use of time series data, it is ideal to carry out stationarity tests on the series to be used. This is justified on the grounds that data not found stationary have the tendency of yielding spurious regression results and thus misleading policy projections. Below is the variables made stationary with their corresponding order of integration. Table 4.1: Unit Root Test VARIABLE ... Continue reading---
REFRENCES - [ Total Page(s): 1 ]Adeyeye, U. (2006) Interest Rate Regulation, Deregulation and Saving Mobilization in Nigeria, 1970-1994. An unpublished M. Sc thesis, Dept of Economics, A. B. U. Zaria. Abdul, A. and Marwan, S. (2013) “Finance and Growth: Some Theoretical Considerations and A Review of the Empirical Literature” Economic Department Working Paper 228, Organization for Economic Co – operation and Development (OECD), Paris. Akomolate, A.S and Ajiboye, G.U (2015) “An Econometric Study of the Market fo ... Continue reading---
-
ABSRACT - [ Total Page(s): 1 ]The relationship between interest rate and domestic investment has attracted the attention of economists and other economic experts. This study carried out an empirical analysis of the impact of interest rate on domestic investment in Nigeria covering the period 1980-2016. Data for the research was extracted from the central bank of Nigeria statistical bulletin. The methodology adopted in the research is the multiple linear regression with the application of Ordinary least Squares (OLS) techniqu ... Continue reading---
CHAPTER FIVE -- [Total Page(s) 1]
Page 1 of 1
CHAPTER FIVE -- [Total Page(s) 1]
Page 1 of 1