CRUDE OIL PRICE VOLATILITY AND FINANCIAL SECTOR BEHAVIOUR IN NIGERIA

ISBN-13: 9786208418977 / Angielski / Miękka / 2025 / 148 str.

Taiwo Muritala

Opis

This study explored the impact of crude oil price volatility on financial sector behavior in Nigeria, using annual data from 1981 to 2016. Analytical techniques included ARDL/Bound testing, Multivariate Granger causality, and ARCH/GARCH models. Key findings were:1. Internal Shocks (e.g., inflation, exchange rate, corruption index, trade openness): These had significant positive impacts on the financial sector.2. External Shocks (e.g., crude oil price volatility, foreign direct investment, GDP, political instability): These had significant negative impacts.Additionally, the study found a high short-run adjustment speed and both positive and negative long-run impacts depending on the factor. Causal relationships included independent causality at the aggregate level and unidirectional causality at the disaggregated level between crude oil price volatility and financial sector behavior.Conclusion: An increase in oil prices stimulates demand for financial services. The study recommended monitoring macroeconomic indices like oil price volatility and trade openness and promoting institutional reforms to ensure financial sector stability in Nigeria.