Investigating the Impact of Financial Market Development on Energy Consumption in Nigeria: Evidence from Dynamic Ordinary Least Squares
Babangida Mohammed *
Misau Local Education Authority, Bauchi-State, Nigeria and Department of Economics, Faculty of Social Sciences, Bauchi State University Gadau P.M.B 062. Yuli Campus Bauchi State, Nigeria.
Muhammad Rilwanu Umar
Department of Economics, Faculty of Social Sciences, Bauchi State University Gadau P.M.B 062. Yuli Campus Bauchi State, Nigeria and Adamu Tafawa Balewa College of Education Kangere, Bauchi-State, Nigeria.
Mamuda Abdu
A.D Rufa’I College of Education, Misau, Bauchi-State, Nigeria and Department of Economics, Faculty of Social Sciences, Bauchi State University Gadau P.M.B 062. Yuli Campus Bauchi State, Nigeria.
Abubakar Tijjani
Department of Accounting, Faculty of and Management Sciences, Federal University of Kashere, Gombe State-Nigeria.
*Author to whom correspondence should be addressed.
Abstract
This paper investigated the impact of financial development on energy consumption in Nigeria using annual data from 1981 to 2019. The cointegration relationship was examined using Johansen and Juselius test while dynamic ordinary least square test for the model estimation. Test results indicate the existence of long run relationship between financial development and energy consumption in Nigeria. In addition, the dynamic ordinary least square test results show that financial development and economic growth have a positive effect on energy consumption in Nigeria. For this reason, policy makers should also take into account the impact of financial development on energy consumption while setting energy policies and setting targets.
Keywords: Financial market development, energy consumption, economic growth, dynamic ordinary least square, Nigeria