Banking sector innovations and manufacturing sector performance in Nigeria
DOI:
https://doi.org/10.33003/fujafr-2026.v4i1.316.307-319Keywords:
ARDL model, Banking innovation, Financial technology, Manufacturing sector, NigeriaAbstract
Purpose: This study evaluates the influence of banking sector innovations on manufacturing performance in Nigeria from 2010 Q1 to 2023 Q4. The research examines how digital financial tools, specifically Automated Teller Machines (ATMs), Point-of-Sale (POS) terminals, Web Payments, and Real-Time Gross Settlement (RTGS) systems, affect manufacturing output.
Methodology: Utilizing an Autoregressive Distributed Lag (ARDL) model, the study analyses quarterly secondary data sourced from the Central Bank of Nigeria. Manufacturing output serves as the dependent variable, while various banking innovations represent the primary explanatory measures.
Results & conclusion: Empirical results reveal a complex, non-linear relationship. While current-period coefficients for ATMs, POS, and Web payments show a negative nexus with production, their first-period lagged values exhibit a positive effect. This suggests that the benefits of financial innovation are subject to a maturity period rather than being instantaneous. Conversely, RTGS systems demonstrate a persistent negative impact. The study concludes that banking innovations currently exert a weak, inconsistent influence on Nigeria's industrial sector due to delayed adoption benefits and systemic inefficiencies.
Implication of findings: Findings highlight that technological adoption without robust institutional support yields sub-optimal results. To foster an efficient ecosystem, policy efforts must prioritize resolving infrastructural bottlenecks, specifically electricity and internet unreliability. This research contributes to the Constraint-Induced Financial Innovation discourse by emphasizing the necessity of aligning fintech evolution with specific industrial needs to drive long-term economic expansion.
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