Abstract
This study examines the impact of innovative financing mechanisms on economic growth in Nigeria, focusing on crowdfunding, public-private partnerships, venture capital investments, remittances, and foreign direct investment, alongside key macroeconomic variables such as trade openness, interest rate, and exchange rate. Using annual data from 1990 to 2023 and employing the Autoregressive Distributed Lag (ARDL) model, the study captures both the short-run and long-run dynamics between these financing mechanisms and economic growth. Findings reveal that crowdfunding has a significant positive impact on economic growth in both the short and long run, underscoring its growing importance as an alternative financing source that enhances entrepreneurial activity and capital formation. Conversely, public-private partnerships exhibit a significant negative effect on economic growth, highlighting the institutional, regulatory, and operational challenges that undermine their effectiveness in Nigeria. Exchange rate volatility significantly hampers economic growth, emphasizing the importance of exchange rate stability in fostering investor confidence and macroeconomic stability. Interest rates show a positive influence, suggesting that effective monetary policy can support economic growth. Remittances demonstrate limited long-run impact, largely due to their predominant use for consumption rather than productive investment. Foreign direct investment and venture capital investments do not exhibit significant long-run effects, underscoring the need for reforms that enhance the investment climate and foster linkages between foreign investors, domestic enterprises, and innovation ecosystems. The study recommends targeted policy actions to enhance the efficiency of innovative financing mechanisms, strengthen institutional frameworks, and promote financial innovation to maximize their developmental impact on Nigeria’s economic growth.