Entrepreneurship, banking stability and environmental sustainability in Nigeria’s development process

This study examines how entrepreneurship, banking system stability, and environmental sustainability jointly influence economic development in Nigeria. It addresses the limited integration of these relationships in prior studies by providing a broader development perspective. Using annual data and an autoregressive distributed lag framework, the study estimates both short-run dynamics and long-run relationships. The results show that banking profitability significantly supports real GDP per capita, while capital adequacy and External Assets to Total Assets exert negative effects, suggesting possible constraints on domestic credit and investment. Entrepreneurship has a negative contemporaneous effect but a positive lagged response, indicating that new firms require time and supportive conditions before contributing meaningfully to development. Carbon emissions reduce economic development in the short run, while their long-run effect is insignificant. The positive coefficient on non-performing loans is interpreted as a delayed consequence of earlier credit expansion rather than a beneficial outcome. Overall, the findings show that entrepreneurship alone is insufficient to drive development. Its contribution depends on profitable, domestically oriented, and well-regulated banks, stronger enterprise survival, improved credit allocation, and environmentally sustainable production. The study recommends policies that align financial stability, productive lending, entrepreneurial resilience, and inclusive green growth.