Empirical Evidence of Causal Relationship between Economic Empowerment and Financial Savings
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Date
2011
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Department of Business Administration, Adekunle Ajasin University, Akungba-akoko
Abstract
This paper examines empirically the long-run relationship between real-gross domestic saving (ODS) and economic empowerment as measured by HDI for Nigeria (1971-2007) using a developed approach to cointegration by Pesaran et al: (2001) that performs well with small samples and regardless of the orders of the respective time series [i.e., whether time series are 1(0), 1(1), or 1(0)/1. (1)]. The empirical results reveal that a long-run relationship exists between the variables. The Granger causality test' supports bidirectional. causality between economic empowerment and financial saving in Nigeria. This implies that government can either implement enhance saving policies to achieve an improve economic empowerment or use training and financial policies to empower people which will in turn have multiplier effect on savings.
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Empirical Evidence, Economic Empowerment, HDI, Financial policies