EXAMINATION OF CASUAL RELATIONSHIPS AMONG HUMAN CAPITAL, PHYSICAL CAPITAL, FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH: A CASE STUDY OF NIGERIA
Abstract
This study investigates the causal relationships among human capital, physical capital, financial development, and economic growth in Nigeria using annual time-series data from 1991 to 2020. Drawing on secondary data from the World Bank, Central Bank of Nigeria, and the National Bureau of Statistics, the study employs descriptive statistics, unit root and co-integration tests, and the Ordinary Least Squares (OLS) estimation technique to examine how these key development variables influence economic performance. The findings reveal that human capital, physical capital, and financial development each exert a positive and statistically significant impact on Nigeria’s economic growth. Specifically, investment in education and health enhances labor productivity; increased physical capital formation strengthens productive capacity; and financial development improves credit access, resource allocation, and investment efficiency. The study concludes that sustained economic growth in Nigeria depends on coordinated policies that strengthen human capital development, expand infrastructural investment, and deepen financial sector efficiency. It recommends enhanced funding for education and infrastructure, financial inclusion initiatives, and stronger institutional frameworks to support long-term economic transformation.
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