THE NEXUS BETWEEN FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH; GHANAIN EXPERIENCE
Keywords:
Finance, Economic Development, Growth, NigeriaAbstract
This study examined the nexus between financial development and economic growth in
Ghana; Economic Growth is proxied with Gross Domestic Product Per Capita was used as
the dependent variable while Gross Fixed Capital Formation, Foreign Debt, Foreign Direct
Investment and Trade Openness were employed as independent variables. Secondary data
analyzed, using descriptive statistics, unit root test, Johansen Co-integration, and ordinary
least square methods of multiple regression. It was evident that Gross Fixed Capital
Formation (GFCF) and Foreign Direct Investment (FDI) depicts positive and significant
influences on Gross Domestic Product Per Capita while Foreign Debt (FD) and Trade
Openness (OP) have negative and significant influence on Gross Domestic Product Per
Capita. Hence, it is observed that there is a significant relationship between finance and
economic development in Ghana. It is recommended that the Ghanaian financial
development should be encouraged to support economic growth and development.