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ABSTRACT
It has been argued that there exist a relationship between economic growth and increased level of industrial activities. The main objective of this research is to ascertain the nature of relationship between financial growth and industrial growth. Therefore, this study has empirically investigated the impact of industrial activities on financial growth in Nigeria for the period 1981-2019. The variables considered are the ratio of private sector credit to GDP, a proxy for financial growth, as the dependent variable while real GDP per capita, a proxy for GDP, industrial output, a proxy for industrial growth and investment as the independent variables for the study. Augmented Dickey-fuller (ADF) test was used for the unit root test and the variables were found to be stationary at second difference. Then Johansen (1988) technique was used to establish if the stationary variables are co-integrated. Further, ECM is employed to correct any form of disequilibrium in the short run. The result of stationarity and normality test reveals that the model is fairly well specified and could be used for policy analysis. The analysis was based on data extracted from Central Bank of Nigeria (CBN) statistical bulletin and World Development Indicators (WDI). The result of the analysis shows that all the variables were statistically significant at 5%. The results reveal that there is, overall, a positive relationship between financial growth and industrial growth. The study therefore suggest that the government should adopt policies capable of stimulating industrial activities which will ensure sustainable financial growth.
