Journal of Finance and Bank Management

Gerschenkron’s Structuralist Hypothesis Effect on Corporate Restructuring and Economic Development: Implications for Regulatory Incentives
Bassey I. Ibor

Abstract
This study was conducted to investigate how impact of the Gerschenkron’s structuralist hypothesis effect on the contributions of corporate restructuring, in Nigeria’s banking sector, to economic development can be used to inform disposing regulatory incentives. The ordinary least squares procedure was applied to analyze and test time series data on the Nigerian banking sector, obtained and tabulated from 1990 to 2013 . The gross domestic product was used as proxy for economic development. Results from the test of data showed that all the variables in the model used for the study were correctly signed, corresponding to the study’s a priori expectations and are jointly statistically significant at 5 per cent level (F0.05 = 25.83). Aggregate credit to the private sector (ACP) and foreign direct investment (FDI) were found to be the most reliable variables that significantly influence economic development in Nigeria, while profits and staff levels were not. The Durbin Watson statistic, of 1.63, shows that the model is good for policy analysis. Accordingly, the study recommends that the Central Bank of Nigeria (CBN) should pursue a regime of incentives which encourage banks to invest their, usually substantial, post-restructuring capital and subsequent profits in the real sector to boost the productive capacity of Nigeria’s economy. Further, the regulatory authorities should set strict standards of accountability and corporate governance, including measured sanctions, to check the diversion of post-merger capital of banks by corrupt boards and top managements of banks, to remove the Gerschenkron’s structuralist hypothesis effect.

Full Text: PDF     DOI: 10.15640/jfbm.v3n1a9