The Contribution of Listed Banks to Economic Development in Nigeria
Keywords:
Deposit Money Banks, Value Added, Economic Development, Employee Wages, Dividends, Retained Earnings, Government Tax.Abstract
Deposit Money Banks (DMBs) exert a vital role
in funding economic projects in developing
countries. Generally, DMBs assume an
intermediary role between surplus and the deficit
units. In the light of this, this research paper
appraised DMBs as panacea to economic
development in Nigeria using data drawn from the
financial statements of eight banks from 2008 to
2015. The study took Gross Domestic Product as
the dependent variable and used Employee
Wages, Tax paid to government, Interest paid to
Creditors, Dividends paid to shareholders and
Retained Earnings as independent variables
coupled with the use of correlation analysis and
panel data regression technique. The paper
revealed that the independent variables exert a
positive effect on development of the economy,
however, both wages paid to banks’ employees
and retain earnings exert significant positive
effects on economic development. Hence, the
paper recommends that DMBs should at least
maintain the current wage rate and corporate
retention policy in order to continue to contribute
to economic development in Nigeria.
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